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All-India Energy Demand to be Higher Year-on-year in 4QFY21: India Ratings

(26 Mar 2021)

India Ratings and Research (Ind-Ra) has published the March 2021 edition of its credit news digest on India’s power sector. The report highlights the trends in the power sector, with a focus on capacity addition, generation, transmission, merchant power, deficit, regulatory changes and the recent rating actions by Ind-Ra.

India Ratings and Research (Ind-Ra) has published the March 2021 edition of its credit news digest on India’s power sector. The report highlights the trends in the power sector, with a focus on capacity addition, generation, transmission, merchant power, deficit, regulatory changes and the recent rating actions by Ind-Ra.

The all-India energy demand is expected to be higher in 4QFY21 on a yoy basis, despite partial lockdowns in some of the states on account of an increase in COVID 19 cases. In February 2021, the all-India energy demand increased 0.2% yoy to 104.6 billion units (January 2021: up 5.0%; December 2020: up 4.9%). The energy demand over April 2020-February 2021 was lower by 2.8% on a yoy basis (9MFY21: down 3.9% yoy; 1HFY21: down 8.7% yoy; 1QFY21: down 15.9% yoy).

The short-term power price at Indian Energy Exchange continued its improving trend on a yoy basis with the prices breaching INR4/unit in March 2021 for the first time since October 2018 (first 25 days of March 2021: INR4.1/unit; February 2021: INR3.39/unit; February 2020: INR2.91/kWh). In February 2021, a 19.5% yoy increase (5,124 million units) in the traded volumes was witnessed in the day-ahead market.

The electricity generation increased 0.1% yoy to 101.1 billion units in February 2021 (January 2021: up 5.4%; December 2020: up 4.6% yoy), supported by 1.9% yoy growth in thermal generation (up 7.1% yoy; up 5.8% yoy), although hydro generation fell 14.0% yoy (down 8.0%; down 8.2% yoy). Electricity generation from renewable sources increased 2.0% yoy to 11.5 billion units in February 2021, with solar generation increasing 12.2% yoy. The renewable generation over 11MFY21 improved 5.8% yoy to 134.3 billion units.

The improvement in energy demand and the reduced generation from hydro and renewables sources have helped the thermal plant load factor (PLF) increase to 63.3% in February 2021 (February 2020: 60.3 %; January 2021: 61.2%). In February 2021, the thermal sector’s PLFs rose on a yoy basis across the central, state and private sectors, increasing to 73.8% (February 2020: 69.5%), 57.7% (54.6%) and 59.8% (57.5%), respectively. Despite showing a yoy improvement during September 2020-February 2021, the thermal PLFs over 11MFY21 was lower at 53.4% (11MFY20: 56.4%), mainly impacted by a decline in power demand, given the must-run status of nuclear, hydro and renewables.

The coal production by Coal India Limited (CIL) fell by 6.6% yoy to 61.9mt in February 2021, after showing yoy growth between August to December 2020 (January 2021: down 4.1%). The recovery in power demand over April-February 2021 led to a gradual rise in coal offtake over the same period (3QFY21: 154.4mtpa; 2QFY21: 134.2mtpa; 1QFY21: 120.6mtpa), and coal inventory at thermal power stations on 28 February 2021 fell by 14.3% yoy to 31.9 mtpa , owing to the improved demand and lower coal production in January and February 2021.

The transmission line addition improved to 12,369 circuit kilometres (km) over 11MFY21 (11MFY20: 10,226 circuit km) and it was higher at 2,477 circuit km in February 2021 (February 2020: 632 circuit km).

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News Source : Inergystat

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