COVID-19 to turn power demand growth negative in fiscal 2021; revival likely fiscal 2022 onwards
Power demand nosedived by ~16% in the first quarter of fiscal 2021 as economic activity skid to a halt with the nation entering a full lockdown as part of containment measures. Industrial and commercial demand nosedived during the period due to a nationwide lockdown that brought all activities, except essential services, to a standstill, even as domestic power consumption surged owing to most of the population forced to stay indoors as social distancing measures took over. Agricultural activities, deemed essential to the economy, continued uninterrupted through the lockdown, thereby insulating demand from agriculture sector.
Power demand, which halted its decline in June as the nationwide lockdown was lifted, remained sluggish through the second quarter on account of partial lockdowns and area-specific restrictions. Recovery picked up pace only in September, registering its first positive growth at 4% on the back of healthy pick-up in economic activity. Power demand has continued to grow at a healthy pace over the third quarter with ~11% growth in October 2020 on account of further relaxations and lower base ofOctober 2019, although growth moderated to 3.7% in November. Industrial activity, which was grappling with weak demand, supply chain disruptions, and labour availability issues, found new wings with festive demand and gradual ironing out of operational issues, giving a healthy boost to industrial demand. Commercial demand is likely to have remained subdued with most large corporates persisting with work-from home arrangements and schools and colleges remaining closed in most places, however festive boost to activity at retail establishments and mild uptick in certain tourism activities provided some support. Domestic demand continued on a strong note, with large parts of the population staying home as precautionary measure, resulting in increased usage of electronic devices by residents at home, whereas agricultural consumption continued abated.
