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The capacity utilisation or Plant Load Factor (PLF) of thermal power stations across the country plunged to a record low of 45 per cent during April-May of FY21 when peak lockdown shrunk electricity demand.
This is 18 per cent lower than the year ago period, a study by CARE Ratings showed, quoting figures from Central Electricity Authority (CEA).
“There was a pickup in electricity generation in May 2020 over April 2020 across both conventional and renewable sources (barring solar power) which can be attributed to the easing of the lockdown and the improvement in demand situation. Nevertheless, generation from conventional sources (thermal, hydro and nuclear sources) was 18 per cent lower than that in May 2019”, the study noted.
Consumption of electricity in the country has seen a significant decline since the lockdown (last week of March, especially by commercial and industrial units who are the major and higher tariff paying consumers. The pan India energy demand fell to a five-year low during Apr-May despite seasonal factors- summer months and rising temperatures.
Energy demand during April-May at 188 billion units was 19 per cent lower year-on-year (y-o-y). Similarly, the peak power demand during these two months at 167 GW was nine per cent lower y-o-y. Demand rose by 20 per cent in May (103 billion units) from the lows of April (86 billion units) with the easing of the lockdown restriction and the rise in summer month temperature. It, however, was lower than the pre-lockdown (around two per cent than February) as well as a year ago level (15 per cent lower than May).
Both energy demand and supply declined by 19 per cent in April-May, taking the electricity deficit to 0.51 per cent during this period, marginally higher than the deficit of 0.47 per cent YoY.
Market participants, including industries and state power distribution companies, have been increasingly turning to the power exchanges to meet their short term power requirements at lower rates, even reportedly replacing their costlier purchases from generators.
There has been an increase in the volume of trade transacted on the power exchanges – the traded volumes on the Indian Energy Exchange (IEX) in May at 5574 million units (MU) was 48 per cent higher than a year ago and 51 per cent more than a month ago (April).
The availability of ample supply amidst lower power demand led to a decline in prices of electricity in the day ahead market (DAM). The average prices of electricity in the day ahead market in May at Rs.2.57 per unit was 23 per cent (or Rs 0.76 per unit) lower than a year ago. It was however six per cent (of Rs.0.15 per unit) higher than month ago. This can be ascribed to the increase in consumption in May with the easing of the lockdown.
