COVID 19 Effect: Power generation from renewables remain unaffected while thermal suffered says Ind-Ra

COVID-19 led lockdown the all-India energy demand in March this year decreased 8.9% yoy to 98.8 billion units (BU) while energy supply decreased 9.2% yoy, resulting in the energy deficit remaining at 0.4% (March 2019: 0.4%), noted in its new report.

Despite a reduction in power demand in March 2020, the energy demand for FY20 was higher by 1.2% yoy. The power demand declined for March and April 2020, amid the lockdown after the demand had seen signs of improvement over November 2019-February 2020.

A recovery remains uncertain due to the uncertainty around any relaxation of the timelines of the lockdown period amid rising cases and its impact on economic growth.

The research firm noted that “With the decrease in demand, electricity generation (excluding ) also decreased 8.8% yoy to 97.7BU in March 2020 with thermal generation declining 11.1% yoy. Thermal plant load factor (PLF) declined to 52.6% in March 2020 (February 2020: 60.4%; March 2019: 62.9%) on account of the lower demand.”

Central, state and private sector PLFs decreased to 65.2% in March 2020 (March 2019: 77.3%), 46.1% (58.8%) and 47.5% (55.6%), respectively. Thermal PLFs were impacted most due to the decline in the power demand in March and April 2020, given the must-run status of nuclear, and renewables Thermal PLFs are expected to remain low, on account of the extension of lockdown, said in the report.

The short-term power price at Indian Energy Exchange was lower at INR2.46/kWh in March 2020 (March 2019: INR3.12/kWh), as the difference in buy and sell bid volumes widened to negative 7,662 million units (MU; negative 3,321MU). The traded volume on short-term power market increased 18.3% yoy to 3,971MU on account of favourable prices on the exchange for both distribution companies and open access buyers.

The coal production by Coal India Limited increased 6.5% yoy to 84.4mt in March 2020, owing to higher production at its key subsidiaries – Mahanadi Coalfields Limited (up 6.6% yoy), South Eastern Coalfields Limited (up 21.8% yoy) and Western Coalfields (up 16.8% yoy). However, coal production over FY20 was still marginally down 0.8% yoy to 602.1mt, due to an extended monsoon and protests by employees in some of the mines. The coal inventory at thermal power stations rose 45.4% yoy to 45.0mtpa, due to continued coal production, as coal is an essential service, despite the lower demand. Coal availability at pithead and non-pithead plants on 31 March 2020 remained at 19 days and 32 days, respectively.

Transmission line addition has been lower in FY20, with 11,664 circuit kilometres (km) added (FY19: 22,437 circuit km). The length of transmission lines added in March 2020 was also lower at 1,438 circuit km (March 2019: 2,868 circuit km), with 65% of addition coming from the central sector.