COVID 19 Cascading Impact on Power Demand-Supply Build Up in India: Are there Recovery Greens Flashing or the Reds Likely to Persist for Long?

On March 23rd, 2020, India began an unprecedented 21-day lockdown to fight the spread of Coronavirus. In this troubling times of ‘social distancing’ and ‘work of home’, the power distribution sector is also bound to get an adverse impact of this pandemic. The COVID-19 lockdown has led to shut down of all but essential commercial & industrial activities in the country. Around, 1.3 Billion citizens are confined to their respective homes and in most cases are only allowed to ‘work from home’. Consequently, the electricity demand from industrial and commercial customers has reduced significantly while the residential demand is expected to have increased. Thus, a key risk from the COVID-19 pandemic for already struggling distribution utilities arises from the loss of revenues from commercial and industrial consumers which form a major pie in the revenue generation of such utilities. Further, fixed cost components in tariffs are fairly-low. Discoms will face huge working capital issues which will be a serious challenge at least till April 2021.

A key risk from COVID-19 pandemic for already struggling distribution utilities arises from the loss of revenues from commercial and industrial consumers which form a major pie in the revenue generation of such utilities.

Energy Requirement & Availability (MU) and Peak Power Demand-Supply (GW) Situation in India as on August 2020 (Region Wise)

^{Source: eninrac research, CEA, Ministry of Power}

The power demand in India rose after it dipped during the COVID19 introduced nationwide lockdown. As per National Load Dispatch Centre (NLDC)  after the lockdown was lifted, the average daily power demand stood at 3,595 million units (MU) for the period between June 1, 2020, and August 27, 2020. During the 69-day lockdown period between March 24, 2020, to May 31, 2020, demand averaged 3,037 MU. In the northern region as well the energy demand witnessed during Jan’20 was 29997 MU, which fall to 23770 MU in Apr’20, indicating a downfall of 6227 MU.  The period from May’20-Aug’20 witnessed a rise in the energy demand of 8769 MU. The peak power demand in the region also increased from 57 GW to 64.8 GW from May’20 – Aug’20 which declined by almost 10GW from Jan’20-Apr’20.

_{During Aug’20, the average energy demand/day in the northern region states was observed to be 1273 MU, against which 1272 MU was met.}

In the western region, the energy demand witnessed during Jan’20 was 33615 MU, which fall to 26872 MU in Apr’20, indicating a downfall of 6743 MU.  In the period from May’20-Aug’20, energy demand in the western region witnessed a sinusoidal movement as in May’20, it was estimated to be 31451 MU, which dripped in Jun’20 to 27836 MU. While the energy demand again picked up in Jul’20 to be 30134 MU and fall again in the month of Aug to28692 MU. Variations in the peak power demand was also observed in the western region from May’20 – Aug’20. The same in the month of May was 51.1 GW and in Jun’20 it falls to 47.6 GW. It further minorly picked up in July to 47.9 and again reduced to 46 GW in Aug’20.

During Aug’20, the cumulative average energy demand/day in the western region states was observed to be 949 MU and 100% of it was met.

Month wise Peak Power Demand (In GW) from Jan’20 – Aug’20 for States in Western Region

In the eastern region, the energy demand witnessed during Jan’20 was 10752 MU, which fall to 9654 MU in Apr’20, indicating a downfall of 1098 MU. During May’20 the energy demand increased to 11090 MU which jumped to 13443 MU during Aug’20, indicating a rise of 2353 MU. Further, it decline to 25536 MU in July’20 and increased to 26345 MU in Aug’20. The peak power demand in the region was estimated to be 18.3 GW during Apr’20 which further increased to 23 GW in Aug’20, indicating addition of 4.7 GW.

During Aug’20, the cumulative average energy demand/day in the eastern region states was observed to be 461 MU, of which 459 MU was met.

Of this total per day energy demand, the maximum requirement was from the states – West Bengal (169 MU) & Bihar (111 MU). Whereas Odisha and Jharkhand observed per day energy requirement of 84 MU and 28 MU respectively.

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Month wise Peak Power Demand (In GW) from Jan’20 – Aug’20 for States in Eastern Region

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