India’s May Power Consumption Grows, Despite Setbacks

Power consumption in India grew by over 8.2 per over in May 2021 over the same period in 2020. At 110.47 billion units (BU), the numbers indicate a poor recovery over the figure of 120.02 BU recorded in May 2019, the pre-covid impact year, which really should be the reference for this year. May 2020 had been hit badly due to lockdowns, and consumption had been recorded at 102 BU. Lockdowns had first been imposed nationally starting March 25,last year.

That indicates recovery is still limping along, not helped at all by the local lockdowns in May this year. The power ministry has also pointed to the impact of the twin cyclones on both the west and east coast of the country as paying a role in reduced demand. While industrial demand was hit due to the lockdowns, even residential demand was hit as widespread rains brought in with the cyclones reduced temperatures in the normally hot month. The cyclones also caused power outages in many areas along the coast.

The prognosis for June remains tight, with lockdown conditions set to formally ease in key states like Maharashtra, Tamil Nadu and Karnataka only post June 7 and beyond. That could crimp demand in this month too. For the record, power consumption in June 2020, heavily hit by nationwide lockdowns, was 106.48 Billion units. For the normal year of June 2019, consumption was 118 BU.

The new numbers come as a setback that was anticipated, considering the strong rebound seen in April this year, when consumption came in at 118.08 BU, a YOY growth of 40 percent over the figure last year, which 84.5 BU. Importantly, April 2021 figures had finally overtaken 2019 figures, with April 2019 numbers at 110.1 BU.

April this year also saw record peak power demand hit 182.55 GW. Peak power demand met or the maximum power supplied in a day had also dropped to 132.73 GW in April last year from 176.81 GW in the same month in 2019.

The sluggish demand growth is a huge issue for a strong pipeline of renewable projects, as Discoms have been reluctant to sign up for fresh capacity commitments, considering the surplus situation many face. That has entailed high fixed charges for many, even as stranded projects, both thermal and gas, continue to hang lie an albatross around the system.