India’s Electricity Demand to Grow by 8.0 – 8.5% in FY22

0
259

India’s electricity demand is expected to grow 8-8.5% in FY22, says the rating agency ICRA Ltd.

Commenting further, Mr. Girishkumar Kadam, Senior Vice President & Co-Group Head – Corporate ratings, ICRA, said, “Based on the energy demand growth trends seen during last six-month period, the electricity demand growth outlook for FY2022 is revised upwards to 8.0 – 8.5%, supported by low base effect in FY2021 and faster than
ICRA had earlier estimated an energy demand growth forecast of 6.0% for FY2022 in January 2021 expected recovery in demand post COVID second wave seen in April and May 2021.

The all-India electricity demand during the period from April 2021 to September 2021 has increased by 12.7% to 707 billion units (BU) on a year-on-year (Y-o-Y) basis supported by a lower base, improvement in economic activity and lower than normal monsoons leading to higher demand from the agriculture segment during July and August 2021.

“The energy demand in H1 FY2022 also remained higher by 2.9% against the same in H1 FY2020 (pre-COVID), led by relatively sharper recovery in the energy demand as reflected from 8.4% growth in Q2 FY2022 against Q2 FY2020,” the statement added.

“Notwithstanding the recovery in electricity demand, the all India average thermal PLF level is likely to remain subdued, at below 60.0% in the current fiscal. Thus, the sector outlook on the thermal power generation segment is Negative.

This is also because of the lack of visibility in signing of new power purchase agreements (PPAs) for thermal IPPs and an upward pressure on cost of power generation with the strengthening in fuel price levels and tighter environmental compliance requirements,” the statement added.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.