Icra report: India’s electricity demand to grow 8-8.5% in FY22
According to rating agency ICRA Ltd., India’s electricity demand is expected to increase by 8-8.5 % in Financial Year 2022.
- As per report, all-India electricity demand increased by 12.7% to 707 billion units (BU) on year-on0year basis, during the period from April 2021 to September 2021.
- This increase in demand was supported by a lower base, improvement of economic activity as well as lower than normal monsoons.
- Lower than normal monsoon led to higher demand from the agriculture segment in the period of July 2021 and August 2021.
- Energy demand in H1 of Financial Year 2021-2022 also remained higher by 2.9% as compared to same in H1 FY2020-2021. It was led by relatively sharper recovery in demand of energy as it was reflected from 8.4% growth in Q2 of FY2021-22 as compared to FY2020.
- As per report, all India average thermal PLF level is likely to remain subdued, despite the recovery in electricity demand. It is likely to remain below 60.0% in the current fiscal. Thus, outlook on the thermal power generation is Negative.
- One of the reasons for negative outlook is lack of visibility in signing of new power purchase agreements (PPAs) for thermal IPPs as well as upward pressure on power generation cost with the strengthening in fuel price levels besides tight environmental compliance requirements.
Coal stocks at power projects
- As the power projects, coal stocks have been low as a result of an unprecedented increase in electricity demand because of:
- Resumption in economic activities,
- Heavy rains in September impacting coal production & dispatch, and
- lower electricity production by other fuel sources.
- As on October 1, India’s 72 coal fuelled power projects had less than three days of stocks. On the other hand, 50 plants had stocks worth 4-10 days. Only 13 projects had enough fuel stocks to sustain electricity generation for more than 10 days.
Category: Economy & Banking Current Affairs
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