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The momentum in electricity demand in the first quarter of fiscal 2016-17 has helped increase power generation.

 

But, July 2016 has seen the year-on-year growth in electricity requirement slump to 0.4 per cent indicating a worrisome trend for the remaining period. Electricity requirement growth was the slowest in July in the fiscal so far.

 

This also resulted in electricity generation growth for July falling to 1.9 per cent, the lowest in the 2016-17 fiscal. One of the reasons for July seeing lower demand could be due to monsoons.

 

Data from the Central Electricity Authority shows that electricity requirement across states grew 6.1 per cent in April-July 2016 year-on-year. In comparison, during April-July 2015, the year-on-year growth in electricity requirement was only 0.1 per cent.

 

Growth in electricity demand is critical for the rise in generation by power plants. After a year-on-year growth of 1.9 per cent in electricity availability in April-July 2015, the same period in the current fiscal clocked a growth of 7.6 per cent.

 

The effect on increased electricity generation was also reflected in the Index of Industrial Production data June 2016. The electricity sector index, which has a 10.32 per cent weightage on the IIP data, grew by 9 per cent during April-June 2016 and 8.3 per cent in June 2016.

 

However, as new capacities keep getting commissioned, the plant load factors or capacity utilisation of power plants may get further impacted if electricity demand does not regain the momentum of the first quarter of 2016-17.

 

Thermal power plants, the largest contributor to India’s electricity needs, operated at an average of only 54.13 per cent in July 2016 and 61.54 per cent during April-July 2016.

 

At the end of July 2016, the capacity of thermal power plants in the country increased to 211,539 MW as compared to 191,175.24 MW at the end of the same month last year. The growth in generation capacity of thermal power plant over the last one year has been 10.6 per cent.

 

Total electricity requirement by the states during the current fiscal upto July 2016 stood at 391,780 million units while availability was 388,885 million units, which reduced the power deficit to 0.7 per cent.

Source: The Hindu Business Line