In October, subdued energy demand led to a decline in thermal generation


According to India Ratings and Research, in October 2019, all-India energy demand declined 13.2% yoy for the third consecutive month to 98 billion units (BUs) on account of an extended monsoon and a fall in energy demand from industrial states such as Maharashtra (down 22.4% yoy), Gujarat (down 18.8% yoy) and Tamil Nadu (down 5.2% yoy) due to the economic slowdown. All-India energy supply declined 13.0% yoy in October 2019, resulting in a reduction in energy deficit to 0.5% (October 2018: 0.7%).

On the supply side, electricity generation declined 12.9% yoy to 98.9BUs on a 19.3% fall yoy in thermal generation to 78.7BUs due to lower demand. The thermal generation was impacted due to a 21.8% yoy increase in hydro generation to 15.1BUs. The all-India thermal plant load factor (PLF) fell to 49.2% in October 2019 (October 2018: 63.8%) as central, state and private sector PLF decreased to 55.5% (71.0%), 40.9% (60.4%) and 51.0% (60.8%), respectively.

The short-term power price at Indian Energy Exchange (IEX) decreased to INR2.71/KWh in October 2019 (September 2019: INR2.77/KWh) from INR5.94/KWh in October 2018 on account of a fall in demand on the short-term power exchanges. The difference in buy and sell bid volumes in October 2019 in day ahead market widened to negative 5,848 million units (MUs) (October 2018: 402MUs) on account of subdued demand.

After declining for four consecutive months, the coal production by Coal India Limited (CIL) increased to 39.4 million tonnes (mt) in October 2019. However, it was still 21.0% down on a year-on-year basis owing to lower production at its key subsidiaries Mahanadi Coalfields Limited (down 34.9% yoy) and South Eastern Coalfields Limited (down 30.6% yoy) .The coal inventory at thermal power stations rose 88.6% yoy to 19.0mt due to higher coal production and lower demand as coal offtake declined to 40.5mt (October 2018: 49.96mt). The coal availability at pithead and non-pithead plants on 31 October 2019 remained at six days and 14 days, respectively.

Transmission line addition has been lower in FY20 with 5,988 circuit kilometres added till October 2019 (April-October 2018: 11,799 circuit kilometres). The transmission line addition in October 2019 was 766 circuit kilometres (September 2018: 1,760 circuit kilometres) with 77% of addition coming from the state sector