All-India energy demand continued to contract in December 2019, but shows early signs of recovery

In December 2019, all-India energy demand declined 0.5% yoy for the fifth consecutive month to 100.8 billion units (BUs), with energy demand from the northern region down 2.8% yoy. However, energy demand is showing signs of improvement as the decline in December 2019 was lower than that in October (down 12.9% yoy) and November 2019 (down 4.3% yoy). All-India energy supply declined 0.5% yoy in December 2019, resulting in energy deficit remaining at 0.5% (December 2018: 0.5%).

While the electricity generation (excluding renewables) declined 2.1% yoy to 98.8BU, the generation also showed early signs of recovery with the decline in December 2019 being lower than that in October 2019 (down 6.4% yoy) and November 2019 (down 12.9% yoy). The thermal generation, however, remained impacted with a decline of 4.3% yoy due to a 14.2% yoy increase in hydro generation to 8.9BUs. The all-India thermal plant load factor (PLF) fell to 54.4% in December 2019 (December 2018: 59.5%) as central, state and private sector PLF decreased to 62.6% (72.5%), 47.6% (57.4%) and 54.0% (56.1%), respectively.

Even though the short-term power price at Indian Energy Exchange increased for the second consecutive month, it was lower on year-on-year basis at INR2.93/KWh in December 2019 (December 2018: INR3.30/KWh; November 2019: INR2.86/KWh). The short-term power prices showed an increasing trend due to higher traded volumes at 4,333MU in December 2019 (November 2019: 3,389MU) on account of intense cold in northern India, leading to increased peak power demand.

The coal production by Coal India Limited increased 7.2% yoy to 58.0 million tonnes (mt) in December 2019, after showing a yoy decline for five consecutive months, owing to higher production at its key subsidiaries – Mahanadi Coalfields Limited (up 10.1% yoy), South Eastern Coalfields Limited (up 11.3% yoy) and Eastern Coalfields (up 7.4% yoy). However, coal production over 9MFY20 was still down 5.8% at 388.4mt, compared to 9MFY19, due to an extended monsoon and protests by employees in some of the mines. The coal inventory at thermal power stations rose 90.4% yoy to 31.6mt due to higher coal production and higher reliance on hydropower. The coal availability at pithead and non-pithead plants on 31 December 2019 remained at 11 days and 20 days, respectively.

Transmission line addition has been lower in FY20, with 7,837 circuit kilometres (km) added till December 2019 (April-December 2018: 14,974 circuit km). The transmission line addition in December 2019 was 754 circuit km (December 2018: 1,740 circuit km) with 71% of addition coming from the state sector.