Even after partial easing of Covid-19 lockdown, power demand declines 25%

On a weekly basis, electricity generation is down 3% in the last week of April

Electricity generation in the last week of April was down 25 per cent year-on-year, according to daily electricity generation data, suggesting a decline in economic activity even after the nationwide lockdown was partially lifted from April 20.
 

According to data from the National Load Despatch Centre, electricity generation averaged 2,913 million units (mu) in the last week of the April compared to around 3,000 mu during the preceding week, indicating a 3 cent per cent decline in generation on weekly basis.
 

Compared to 2019, electricity generation is down nearly 25 per cent. In the last of week of April 2019, daily electricity generation was around 3,962 mu on an average.

Usually, there is an increase in electricity generation in the second half of April as summer get intense leading to a rise in day temperature across the country. This leads to greater demand for electricity as consumers use appliances such as air coolers and air conditioners.
 

“If we go by the trading volume on exchange, there has been no appreciable uptick in power demand in the last week or so,” says an Indian Energy Exchange (IEX) spokesperson.

“The trading volume remains volatile and sell bids continue to be nearly three times of buy bids indicating a lack of demand in the system.”

According to IEX, lower electricity demand could also be attributed to unseasonal rains that lashed large parts of North India last week bringing down temperatures, which in turn lead to lower demand for air conditioners and coolers.
 

Analysts say other high frequency data suggests a pick-up in economic activity, especially in rural areas but this may not be reflected in the electricity demand immediately.

“Crop harvesting and related activity has gathered pace in rural areas but this will largely show in demand for transport fuel. Electricity demand could move up after a lag of 2-3 weeks,” says Dhananjay Sinha, head of research and strategist, Systematix Group.
 

According to government energy data for 2018, industry including manufacturing accounts for 40 per cent of all electricity demand in the country, followed by residential segment at 24 per cent and while the agriculture sector accounts for 18 per cent.

The commercial segment, that includes shops and offices, consumes another 9 per cent.
 

The country went into a nationwide lockdown in late March to control the spread of coronavirus. On Friday, the Union government extended the lockdown by another two weeks.