India can see a surge in its electricity demand by 8-10% in FY22

The base deficit rose marginally to 0.4 percent in Dec-21 while the peak deficit fell to 0.1 percent vs 0.6 percent MoM, with the merchant rate at Rs.3.2 per unit

PGurus Newsdesk

January 30, 2022

The base deficit rose marginally to 0.4 percent in Dec-21 while the peak deficit fell to 0.1 percent vs 0.6 percent MoM, with the merchant rate at Rs.3.2 per unit

India’s electricity demand expected to rise by 8-10% in FY22: HDFC Securities

HDFC Securities has projected that India’s electricity demand is expected to rise by 8-10 percent during the financial year (FY) 2022. The rating agency, ICRA Ltd. Had also projected electricity demand to grow 8-8.5% 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.

“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.”

“In the MTD (month-to-date) Jan-22 period as well, demand growth stood at 1.5 percent 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 percent YoY to 63.3 MT in Dec-21.

“The base deficit rose marginally to 0.4 percent in Dec-21 while peak deficit fell to 0.1 percent vs 0.6 percent 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.

[With Inputs from IANS]

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