India: Conventional power generation drops by 4% m-o-m in Aug ’20

Power generation from conventional sources has receded in line with the fall in demand during the month, which had shown a steady growth of late.

Data provided by power ministry indicates that power output was down 4% m-o-m to 103.4 BU in Aug ’20 as against 108.27 BU in Jul ’20. The volume was also 3% lower on the year from 106.2 BU in Aug ’19.

Relaxation in lock-down had raised hope for revival in power sector; however, seasonal variation due to monsoon resulted in sluggish economic activities which slowed down demand from Northern and Western region of the country.

Source-wise generation:

*Generation from thermal plants was particularly affected by abundance of water reserves due to monsoon, whose monthly target was lowered by 4% to 87.43 BU for Aug ’20.

*Output from thermal plants fell by 8% m-o-m to 78.88 BU, whereas that from hydro plants grew by the same rate to 19.36 BU in Aug ’20 and also attained its set target for the month.

*Thermal, hydro and nuclear plants noted a y-o-y decline during the month which reflects subdued power demand. Overall, power generation has fallen 12% to 489.36 BU during the first five month of FY ’21 (Apr-Aug ’20).

Source: Power Ministry
Quantity in Billion Units

No imminent recovery in demand for coal:

There were no signs of considerable improvement in coal demand from power sector, as coal-fired generation decreased 7% m-o-m to 72.51 BU in Aug ’20.

Notably, CIL had not reported a single auction for power sector under special forward scheme during the month on view of the sluggish demand.

However, steady decline in inventory levels is likely to lift coal supply to power plants at a time when the economic activities pick-up. Coal stock at power plants has dropped 10% to 35.573 mn t as on 13 Sep ’20 as against 35.573 mn t recorded on 13 Aug ’20.