Coronavirus Pune: Lockdown to result in 1 per cent reduction in electricity demand

ST Correspondent
Saturday, 2 May 2020

This is the likely projection for the year considering full lockdown till May 17. This was stated in a report by credit rating agency ICRA. It states that the lockdown has adversely impacted the electricity demand and thermal payload factor (PLF) since March 24.

Pune: The demand for electricity has drastically reduced after the imposition of lockdown to control the spread of Coronavirus, and is likely to see a reduction of one per cent for the financial year 2021-22.

DECREASE IN DEMAND
This is the likely projection for the year considering full lockdown till May 17. This was stated in a report by credit rating agency ICRA. It states that the lockdown has adversely impacted the electricity demand and thermal payload factor (PLF) since March 24.

POWER DISTRIBUTION COMPANIES AFFECTED
The industries, IT companies and the hospitality industry has been closed from the past one and a half month. ICRA noted that the lockdown has also adversely impacted the revenues and cash collections for the power distribution companies (discoms), especially given the consumption decline from the high tariff paying industrial and commercial consumers and the likely delays in cash collections from other consumer segments.

DOWNSIDE RISK FOR THE DEMAND GROWTH
This is likely to increase the book loss level for the discoms at all India level by Rs 200 billion in FY2021, with further downside risks arising from any extension in the lockdown period and any delay in issuance of tariff orders or inadequate tariffs approved by the State electricity regulatory commissions, the report said.

Group Head & Senior Vice President of Corporate ratings, ICRA Sabyasachi Majumdar said, “Any extension in the lockdown period would have further downside risk for the demand growth. The decline in demand is expected to suppress the thermal PLF on an all India level to about 54 per cent in FY2021 against our earlier estimate of 60 per cent and from about 56 per cent in FY 2020-21. This would further delay the resolution of stressed thermal assets, a majority of which are impacted by a lack of long-term power purchase agreements (PPAs).”

PAYMENT DELAYS FROM DISCOMS TO POWER GENERATION CO.
Sector Head & Vice President, ICRA Ratings Girishkumar Kadam, said, “This would aggravate the payment delays from discoms to power generation companies, which are already reeling under large payment dues of more than Rs. 920 billion as of February 2020. In this context, the timely and adequate liquidity support from the respective state governments, including the payment of regular agriculture subsidy, remains extremely crucial.” 

This apart, the under-construction renewable power projects are likely to face delays in execution because of disruption in the supply chain in India and labour availability, following the lockdown announced by the Government of India.

Related News

​ ​