Coronavirus in India: Amidst gloom and fear, power demand picks up

Despite the COVID-19 virus fears and a slowing economy, power generation in the country improved by 11 per cent in February, thanks to improved coal stocks at coal-fired power plants and improvement in solar power generation.

Total power generation growth was 10.8 per cent in February. However, it is only 1.5 per cent growth in the 11 months of FY20. The growth was only 5.8 per cent in FY17, 5.4 per cent in FY18 and the lowest in recent years at 5.2 per cent in FY19. All India peak demand increased from 176 GW in FY19 to 183 GW in the 11 months of FY20. Peak demand in February was 170 GW.

The demand uptick in February was broad-based and across states. Coal-based generation increased 10 per cent, hydro generation rose 18 per cent, while nuclear generation was up 8 per cent year-on-year (YoY). Renewable energy generation grew at a healthy pace of 14.5 per cent in February, led by 27 per cent rise in solar generation.

"This is the second straight month of demand uptick after four consecutive months of decline", said a Motilal Oswal research analysis on power demand.

Coal India's production increased by 14 per cent in February and that helped coal-fired power plants to have a stock of 37 million tonnes, which is sufficient for 21 days of consumption. The coal stocks were only 26 million tonnes during the same period last year. This is also the highest coal availability with the coal-fired power plants in the last 12 months. Coal plants account for over 65 per cent of the country's power demands, despite push for green energy in the past few years. If conventional generation growth was at a lower 3.6 per cent in FY19, year to date growth in FY20 is only 1 per cent. Similarly, renewable sources based power generation has also declined from 24.5 per cent growth in FY19 to 6.2 per cent until February.

Overall capacity addition has also improved a bit. If the addition was 12.1 GW in FY19, 13.3 GW has been added in the 11 months of FY20. However, these additions are lower than the 17.2 GW added in FY18 and 20.3 GW added in FY17. Solar capacity additions have come down from 9.4 GW in FY18 to 6.5 GW in FY19 and in the 11 months of FY20 to 6.2 GW.

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