Electricity demand grows 7.4 pc in July, thermal PLF lower: ICRA

Rating agency ICRA today said electricity demand growth remains strong in July 2018 at 7.4 per cent but thermal plant load factor moderated by pick up in generation from wind and hydro sources.

"The all-India electricity demand grew by 7.4 per cent in July 2018 on a year-on-year (Y-o-Y) basis as per the provisional estimates of the Central Electricity Authority (CEA). While the growth moderated from the high of 9.1 per cent reported in June 2018, it continued to remain strong," a statement said.

However, the ICRA said that the all-India thermal plant load factor (PLF) or capacity utilisation moderated to 55.5 per cent in July 2018 from 60.7 per cent in June 2018, due to higher generation from wind and hydro sources, leading to backing down of thermal units. Nonetheless, the thermal PLF is higher on a Y-o-Y basis against 54.3 per cent in July 2017.

Commenting on the trend, Girishkumar Kadam, Sector Head and Vice President, ICRA Ratings, says, "Apart from a few months in between, the monthly electricity demand growth has remained higher than 5 per cent over the past 15 months, reflecting a sustained recovery in demand. In our view, this demand growth trend is likely to continue, given the focus of the central government on improving rural household electrification. Nonetheless, the thermal PLF remains sensitive to the generation from renewable energy sources and coal supply available from domestic sources."