Electricity generation recovering in July

by Yash Shah

Gross generation of electricity recovered in the first 20 days of July 2020. During July 1-20, 69.4 billion KwH of electricity was generated from conventional sources. This was a marginal decline of 1.3 per cent on a year-on-year (y-o-y) basis. Electricity generation recorded a 25.8 per cent y-o-y fall during April 2020. Power generation quickly recovered as lockdown restrictions eased. In June 2020, power generation was down by 11.9 per cent. The y-o-y shortfall is headed to shrink further in July.

July’s recovery can be linked to better generation in the northern, western and eastern regions of the country. Generation of electricity in the northern region grew by 0.4 per cent during July 1-20, 2020. This came after a 13.8 per cent decline recorded in the region during June 2020. Power generation in the western region was down by 1.7 per cent during July 1-20, 2020, compared to 12.8 per cent y-o-y decline recorded in June 2020. A pickup in electricity generation hints at an uptick in industrial activities from these regions. The eastern region surprises. Power generation in the east recorded double digit y-o-y growth in the first 20 days of July 2020.

Generation in the southern region continues to remain low in July. Between July 1-20, 2020, electricity generation in the southern region declined by 20.4 per cent. During June 2020, generation was down by 22.5 per cent. Generation is down in the industrial states of Andhra Pradesh and Tamil Nadu. As per Annual Survey of Industries (ASI), factories from Andhra Pradesh and Tamil Nadu account for approximately 60 per cent of total electricity consumed by the industrial sector of the Southern region. Power generation in these states declined more than 20 per cent during July 1-20, 2020. Generation in north east India continues to remain in the negative territory during the first 20 days of July 2020.

The regional disparities in growth in power generation is intriguing. The sharp rise in the relatively less industrialised eastern region and also the positive growth in agrarian north are in sharp contrast to the industrialised western and southern states. While the western region has recovered, its recovery is not as impressive as the east or the north. Further, the continued sharp y-o-y fall in south is equally intriguing. Perhaps, more data will reveal the reasons for this counterintuitive regional growth pattern.

Coal based electricity generation declined by 5.6 per cent during July 1-20, 2020. The extent of the fall narrowed substantially in July. Coal based electricity generation was down by 20.5 per cent in June 2020. Due to the timely onset of monsoon through the country, hydro based generation recorded double digit y-o-y growth during June 2020 and the first 20 days of July 2020. Hydro based power generation was up by 12.7 per cent during July 1-20, 2020.

During April and May 2020, generation from renewable sources grew by more than 8 per cent on a y-o-y basis. According to the International Energy Agency (IEA), there was a shift from conventional sources of generation towards renewable sources of generation during the lockdown. This happened because of depressed electricity demand and low operating cost of renewable energy based sources of generation. IEA added that as the demand for electricity started rising from June, the share of renewable sources in the power mix started falling. Between July 1-20, 2020, electricity generation from renewable sources declined by 19.5 per cent on a y-o-y basis.

Even though gross generation is rising, India’s plant load factor (PLF) continues to remain low. During June 2020, thermal PLF was 49.5 per cent, compared to 62.4 per cent PLF recorded during the corresponding year-ago period. While power generation in June was 11.9 per cent lower than the year-ago generation, the PLF is 12.9 percentage points, or 20 per cent, lower compared to a year ago. The PLF was 60.3 per cent in February 2020, the month before the lockdown. Demand for power needs to rise much more for the PLF to rise again to over 60 per cent.

CMIE STATISTICS
Unemployment Rate (30-DAY MVG. AVG.)
Per cent
7.7 +0.1
Consumer Sentiments Index
Base September-December 2015
44.7 0.0
Consumer Expectations Index
Base September-December 2015
46.9 -0.6
Current Economic Conditions Index
Base September-December 2015
41.2 +1.1
Quarterly CapEx Aggregates
(Rs.trillion) Sep 19 Dec 19 Mar 20 Jun 20
New projects 3.18 5.26 3.73 0.61
Completed projects 0.84 1.65 1.74 0.19
Stalled projects 0.41 0.61 0.77 0.11
Revived projects 0.43 0.83 0.42 0.55
Implementation stalled projects 0.90 0.15 9.55 0.08
Updated on: 09 Aug 2020 3:28PM
Quarterly Financials of Listed Companies
(% change) Sep 19 Dec 19 Mar 20 Jun 20
All listed Companies
 Income -2.3 -1.7 -4.8 -25.2
 Expenses -3.1 -2.2 -1.8 -27.0
 Net profit -1.3 -11.1 -45.0 -16.4
 PAT margin (%) 5.3 5.1 2.6 7.8
 Count of Cos. 4,450 4,422 4,068 815
Non-financial Companies
 Income -6.3 -5.5 -8.9 -35.8
 Expenses -6.7 -6.3 -4.9 -37.2
 Net profit -13.6 -14.1 -46.6 -37.9
 PAT margin (%) 5.8 5.7 3.6 7.0
 Net fixed assets 10.4 13.1
 Current assets 5.0 2.9
 Current liabilities 5.0 4.6
 Borrowings 8.4 14.6
 Reserves & surplus 5.9 2.2
 Count of Cos. 3,339 3,312 3,073 640
Numbers are net of P&E
Updated on: 09 Aug 2020 3:28PM
Annual Financials of All Companies
(% change) FY18 FY19 FY20
All Companies
 Income 8.4 13.2 5.6
 Expenses 9.8 13.4 3.8
 Net profit -40.0 21.8 27.0
 PAT margin (%) 2.0 2.4 6.3
 Assets 10.9 9.3 12.3
 Net worth 7.5 8.5 9.7
 RONW (%) 3.5 4.4 7.4
 Count of Cos. 26,669 25,353 1,255
Non-financial Companies
 Income 8.6 13.7 0.7
 Expenses 8.7 13.8 0.2
 Net profit -8.6 24.3 -2.8
 PAT margin (%) 2.7 3.2 8.5
 Net fixed assets 7.1 5.0 23.4
 Net worth 6.1 8.4 6.0
 RONW (%) 5.7 7.0 11.4
 Debt / Equity (times) 1.0 1.0 0.6
 Interest cover (times) 2.1 2.4 3.9
 Net working capital cycle (days) 77 70 18
 Count of Cos. 21,754 20,625 909
Numbers are net of P&E
Updated on: 05 Aug 2020 5:28PM