May 13, 2020

Electricity demand down by a quarter in April: Crisil

Electricity demand down by a quarter in April: Crisil

Electricity demand shrank nearly a quarter in April 2020 as commercial and industrial activity switched off majorly following the nationwide lockdown due to the coronavirus pandemic.

For states with higher number of manufacturing units such as Uttarakhand, Gujarat, Haryana, and Tamil Nadu, demand dimmed by a significant 30-50 per cent.

In a Crisil note “Volt-face in the corridors of power,” it highlighted these issues relating to the current power sector scenario in the country.

Put another way, Crisil stated that it is like experiencing a total blackout every alternate or third day!

However, the upshot, according to it, is that the “Power demand growth, which was already feeble last fiscal, could trip to de-growth this fiscal.”

“That said, there was some offset because about 1.4 billion people stayed at home, of which millions also worked from home, leading to a surge in domestic electricity consumption via more recharging of devices, more videos streamed, more online content consumed, and more cooking at home, often involving use of electrical appliances,” the note mentioned.

This surge in demand cushioned the slack-demand blow for Andhra Pradesh, Bihar, Odisha and Haryana in particular, which have a substantial domestic-consumer base.

Lower demand from industrial users, who pay the highest tariffs and cross-subsidise domestic and agricultural users, would hit the revenues of discoms. Sector recovery will be a function of how quickly economic activity replugs, reboots and resurges.

In its overall report titled ‘Covid corollaries’, Crisil said that the State-wise assessment of power demand showed that the top 20 states accounted for about 95 per cent of power demand and these states have been hit hard by the lockdown.

And the top five power consuming states have seen demand fall by a quarter on average in April.

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