Covid 2.0 restrictions to impact energy demand growth recovery: Ind-Ra

The lockdowns on account of an increase in Covid cases in various states can impact all-India energy demand growth recovery in Q1 FY22 although demand is expected to be higher due to lower base effect

The lockdowns on account of an increase in Covid-19 cases in various states can impact all-India energy demand growth recovery in 1Q FY22 although demand is expected to be higher due to lower base effect, according to India Ratings and Research (Ind-Ra).

In March, the all-India energy demand was higher by 22.8 per cent year-on-year at 122 billion units. The early onset of summer season also contributed to the higher demand.

On the other hand, electricity generation increased 23.5 per cent to 118.6 billion units supported by 29.2 per cent growth in thermal generation although hydro generation fell 7.8 per cent.

Electricity generation from renewable sources increased 10.1 per cent with solar generation increasing 21 per cent, said Ind-Ra.

The improvement in energy demand and reduced generation from hydro and renewables sources helped the thermal plant load factor (PLF) increase to 66.5 per cent. In March, thermal sector's PLFs rose across the central, state and private sectors, increasing to 80.4 per cent.

Despite the onset of summer season, said Ind-Ra, imposition of stricter lockdowns in major manufacturing states can impact demand from industrial segment which will impact thermal PLFs.

The transmission line addition picked up substantially in FY21 and improved to 16,750 circuit kilometres over (FY20: 11,664 circuit km) and was higher at 4,381 circuit km in March.

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