Pandemic Causes India’s First Drop in Annual Power Demand
Demand from state distribution utilities dropped 1.1%, marking the first such decline in records going back to 2006.
(Bloomberg) -- India’s annual electricity demand contracted for the first time in at least 15 years, as one of the world’s strictest lockdowns slashed power consumption during the early months of the year ended March.
Demand from state distribution utilities dropped 1.1%, marking the first such decline in records going back to 2006, data from the Central Electricity Authority show. Peak demand during the year rose to 190.2 gigawatts, about half of the country’s installed capacity, from almost 184 gigawatts in the prior year.
Consumption fell as businesses, offices and factories were shuttered after a nationwide lockdown was imposed in March last year. Still, power demand has rebounded as India became one of the few major economies to post growth in the last quarter of 2020, helped by a boost in government spending and the reopening of the economy. Strong demand is key for India to draw investors to its power industry as it seeks fresh capital for its clean-energy transition.
“We are seeing a strong recovery in electricity demand driven by industries and that trend should continue,” said Rupesh Sankhe, vice president at Elara Capital India Pvt. in Mumbai. “The fresh surge in virus cases might pose some temporary risks, but the longer-term demand story is intact.”
Electricity requirement grew in the last seven months of the fiscal year, with total requirement during the period rising 7% from a year earlier, according to the CEA. Sankhe expects electricity requirement to rise at least 10% in the year that began in April, helped by a low base.
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