NEW DELHI: With the mercury rising, India’ peak electricity demand touched a new high of 191.24 gigawatt (GW) on Wednesday.
The last recorded all-time peak power demand of 189.64 GW was on 31 January this year. The new record was set at 12.46pm on 30 June in the backdrop of a large part of northwest India still awaiting monsoon rains.
This assumes importance given that energy consumption, especially electricity and refinery products, is typically linked to overall demand in the economy. Of India’s total electricity demand load pattern, industrial and agricultural consumption account for 41.16% and 17.69%, respectively. Commercial electricity consumption accounts for 8.24%.
This also comes in the backdrop of India’s peak electricity demand falling during the first wave of the coronavirus pandemic, with commercial and industrial demand taking a hit after many factories closed. However, domestic consumption, which generates comparatively lower tariffs, went rose. The demand which had since revived fell again during the second wave.
This comes at a time when India’s thermal power projects’ operating performance is set to improve and bears good news for coal-fuelled power projects that were facing low-capacity utilisation due to muted demand.
Also, the Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the marquee ₹3.03 trillion power distribution company (discom) reform scheme, wherein the Centre’ share will be ₹97,631 crore.
The ambitious scheme aims to bring down India’s average aggregate technical and commercial loss from the present level of at 21.4%, to 12-15% and gradually narrow the deficit between the cost of electricity and the price at which it is supplied to ‘zero’ by 2024-25. The reforms are also aimed at improving the reliability and quality of power supply.
“The scheme is positive for all players across the power sector value chain. We believe this is a precursor to ‘perform or perish’ for inefficient discoms. It is implicit that discoms that are not able to reform and plug losses, will have to give way to privatisation (delicensing is proposed in the draft Electricity Amendment Bill), as states too don’t have the fiscal space to keep funding power sector losses,” ICICI Securities Limited wrote in a report on Thursday.
“Also, with both peak and daily energy demand at all-time highs (peak was 191.2GW on 30th Jun’21), the timing of the reform approval was pertinent. We believe this move will rerate the sector (entire value chain including power financiers) and revive capex (both in generation and distribution),” ICICI Securities Limited report added.
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