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Power generation in India will continue to grow in Q4FY21: Ind-Ra

29 Jan 2021 Evaluate

Rating agency Ind-Ra in its January 2021 edition of its credit news digest on India's power sector has said that with revival of electricity demand and adequate coal stocks at power plants, power generation in the country would continue to grow in fourth quarter of this fiscal year (Q4FY21). The report highlights the trends in the power sector, with a focus on capacity addition, generation, transmission, merchant power, deficit, regulatory changes and the recent rating actions by Ind-Ra.

It said ‘The all-India electricity generation (excluding renewables) is likely to continue its improvement in 4QFY21, backed by a revival in demand and the adequate stock of coal at power plants’. The electricity generation increased 4.6 per cent y-o-y (year on year) to 103.7 billion units in December 2020, supported by 5.8 per cent y-o-y growth in thermal generation, although hydro generation fell 8.2 per cent as compared to the year-ago period due to above-normal hydro generation in 2019.

In November 2020, power generation was up 1.9 per cent y-o-y and in October, it was higher by 8.9 per cent. Electricity generation from renewable sources fell 19.7 per cent y-o-y to 7.5 billion units in December 2020, with wind and solar generation declining 18.7 per cent and 4.6 per cent, respectively. The improvement of 13.3 per cent y-o-y in solar generation in April-December 2020-21 was offset by a decline of 12.9 per cent in wind generation.

The all-India energy demand continued its improving trend in the first 15 days of January 2021, with a 2.4 per cent increase to 52 billion units as compared to the year-ago period. Last month, the all-India energy demand increased 4.9 per cent y-o-y to 106.5 billion units, backed by a strong demand from the northern region (up 7.8 per cent y-o-y) and western region (up 9.3 per cent y-o-y). The energy demand in April-December period of this fiscal year was 3.9 per cent lower as compared to the year-ago period. In January 2021, the peak power demand reached its all-time high of 187.3GW, backed by a revival in economic activities.

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