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Energy demand improves in November, but at a sluggish pace: Ind-Ra report

Electricity generation from renewable sources of solar and wind energy also saw a jump in November, increasing by 7.4 per cent and 11.6 per cent respectively

twitter-logoBusinessToday.In | December 30, 2020 | Updated 19:48 IST
Energy demand improves in November, but at a sluggish pace: Ind-Ra report

The demand for energy has yet again seen a year-on-year (Y-o-Y) growth for the third consecutive month in November 2020, according to a report published by India Ratings and Research (Ind-Ra). The report focuses on aspects such as capacity addition, generation, transmission, merchant power, regulatory changes among others to ascertain the trends in the power sector.

Energy demand is often touted as a barometer for economic growth, and while the months of September and October saw an increase in demand, the period from March to August had witnessed a Y-o-Y decline of 3.7 per cent. Current trends show an increase in demand, but in the 8-month-period from April-November, there has been a 5 percent y-o-y decline.

The surge in demand by 4 per cent in September and 11.5 per cent in October is attributed to the advent of winters, increasing the demand in the northern region of the country. In southern parts of India, demand declined by 3.8 per cent in October, while increasing by 3.3 per cent y-o-y in September 2020.

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Electricity generation from renewable sources of solar and wind energy also saw a jump in November, increasing by 7.4 per cent and 11.6 per cent respectively.  

Electricity generation excluding renewable energy sources increased by 1.9 per cent Y-o-Y to 95.3 billion units in November 2020, while an 8.9 per cent Y-o-Y increase was also seen in October. This is attributed to a 4.1 per cent and a 13.3 per cent increase in thermal generation in the months of November and October respectively. Having said that, hydro generation declined 17 per cent y-o-y in November, also declining 10.3 per cent in October.

The short-term price of power at the Indian Energy Exchange in November 2020 came down to Rs 2.73/kWh from Rs 2.86/kWh in November last year. The decrease in the short-term price despite the increase in demand is owing to a strong supply that satiates the growth in demand for energy.

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