India’s power demand expected to rise by 8-10% in FY22

New Delhi, Jan 29 (IANS) India’s electricity demand is now expected to rise in the range of 8-10 per cent during FY22, said HDFC Securities.

The brokerage house had earlier predicted a 12 per cent rise in power demand in FY22.

Accordingly, the downward revision of demand expectation is largely due to a prolonged winter and disruptions in demand caused by the rising corona cases in January 2022.

Notably, the overall demand has increased by 9.5 per cent on year-on-year (YoY) basis in the ‘YTDFY22’ period.

“The proposed Electricity Amendment Bill 2021 is now delayed as the Centre has dropped the DBT on power subsidies from the same, besides dropping the provision of creating a new Electricity Contract Enforcement Authority,” HDFC Securities said in a report.

“However, with CCEA approving the Rs 3.03 trillion reform-linked package, we can expect improved infrastructure Capex from discoms over the next 3-4 years. This would, in our view, lower ‘AT&C’ losses, nullify the ‘ACS-ARR’ gap, and promote private participation in the discom space.”

According to the report, the power demand grew by only 2.5 per cent on a year-on-year basis last month due to low temperatures at the onset of peak winter.

“In the MTD (month-to-date) Jan-22 period as well, demand growth stood at 1.5 per cent YoY, mainly due to a partial lockdown imposed across states due to rising Covid cases,” the report said.

“Lower power demand and improved coal supply led to a ‘3x’ increase in coal stocks across stations compared to the critical level of Oct-21.”

As per the report, coal dispatches to the power sector surged by 41.5 per cent YoY to 63.3 MT in Dec-21.

“The base deficit rose marginally to 0.4 per cent in Dec-21 while peak deficit fell to 0.1 per cent vs 0.6 per cent MoM, with the merchant rate at INR3.2 per unit.”

In addition, it cited that as of January 2022, discoms’ outstanding dues have risen to Rs 1,066 billion.



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