Domestic energy demand rises 4% in September post-Unlock4.0; PLF up 62.8%

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The coal production by Coal India increased 31.6 percent yoy to 40.5mt in September 2020 owing to the higher production at its key subsidiaries

Energy demand increased 4 percent yoy across the country after declining for the six consecutive months to 112.6 billion units, according to a report.

This was led by an improvement in the demand from the northern region (up 6.2 percent; August 2020: up 1.3 percent) and the western region (up 9.2 percent; down 3.3 percent), due to the further lifting of lockdown for certain economic activities under Unlock 4.0. Even though the energy demand has been recovering, the demand over 1HFY21 came in 8.7 percent yoy lower, said a report by India Ratings (Ind-Ra).

“Electricity generation (excluding renewables) increased 4.4 percent yoy to 109.8 billion units in September 2020 (August 2020: down 2.6 percent), owing to an 8.4 percent yoy growth in thermal generation. Thermal PLF increased to 55.2 percent in September 2020 (September 2019: 51.3 percent; August 2020: 49 percent) on account of the increased demand and sufficient coal supply at power plants,” said the report.

Central and private sector PLFs increased to 62.8 percent in September 2020 (September 2019: 58.8 percent) and 59.9 percent (51.3 percent), respectively, while state sector PLF fell marginally to 43 percent (43.4 percent), it said.

The increase in central sector PLF was majorly due to an improvement in the PLF of NTPC Limited to 65.6 percent (61.8 percen)t; and that of Damodar Valley Corporation to 66.9 percent (51.5 percent). The thermal PLF over 1HFY21 was lower at 49.6 percent (1HFY20: 57.9 percent), most impacted by the decline in the power demand, given the must-run status of nuclear, hydro and renewables.

The short-term power price at Indian Energy Exchange continued to be low at Rs 2.69/kWh in September 2020 (September 2019: Rs 2.77/kWh; August 2020: Rs 2.43/kWh) with a 35 percent yoy increase in the traded volume witnessed in the day-ahead market. The increased power demand in the short-term power market was on account of the favourable prices on the exchanges for both distribution companies and open-access buyers and the gradual lifting of the lockdown.

The coal production by Coal India increased 31.6 percent yoy to 40.5mt in September 2020 (September 2019: 30.8mt; August 2020: 37.2mt) owing to the higher production at its key subsidiaries - Mahanadi Coalfields Limited (up 68.5 percent yoy), Central Coalfields Limited (up 47.4 percent yoy) and Northern Coalfields Limited (up 20.8 percent yoy) due to the resolution of the previous year’s issues such as protests at one of the mines and heavy rainfall.

The coal inventory at thermal power stations rose 98.2 percent yoy to 34.2mtpa in September 2020, due to continued coal production, as coal is an essential service, and lower consumption over 1HFY21. The recovery in power demand over 1HFY21 led to a gradual rise in coal offtake over the same period (September 2020: 46.46mtpa; April 2020: 39.06mtpa). However, Coal India’s coal supply to the power sector fell 10 percent yoy in 1HFY21 to 197.9 million tonne.

The transmission line addition was lower over 1HFY21, with 11,541 circuit kilometres (km) added (1HFY20: 12,766 circuit km) although the length of transmission lines added in September 2020 was higher at 4,203 circuit km (September 2019: 766 circuit km), with 89.2 percent of addition coming from the central sector.

Image credit: The Week

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