India doubles in solar and gas at coal cost as electricity use declines

CHENNAI: India's gas and solar electricity generation increased in April, even as overall energy demand fell to the highest monthly rate in at least thirteen years, Reuters analysis of provisional government data showed.

It increased 16.9%, representing a record 5.6% of the country's total production, while gas power production was 13.7% higher, an analysis of daily cargo dispatch data from state power operator POSOCO showed. However, wind power generation fell 11.4%.

According to the data, electricity generation from coal, India's main source of electricity, fell 32.3% to 1.91 billion units per day, and its contribution to total electricity generation fell to 65.5%, compared to an average of over 73.7% last year.

Solar production increased in the southern states, while gas power plant operators in the west used cheap imported gas to meet peak demand, a senior energy ministry official said, adding that many coal service companies They were closed for maintenance.

India, the world's second largest consumer, importer and producer of coal and the third-largest emitter of greenhouse gases, hopes to continue to rely heavily on coal for electricity, but has promised that clean energy will account for at least 40% of its installed capacity by 2030, above the current 22%.

Overall electricity use fell about 24% in April, POSOCO data showed, as all industries and offices not classified as essential were closed as part of a national blockade to prevent the spread of electricity.

With the blockade extended with certain relaxations for another two weeks, state-owned Coal India Ltd could face higher inventory and lower sales, while Indian utility companies could face more financial stress.

Utilities were experiencing a protracted industrial slowdown before the pandemic occurred, with electricity demand increasing only 1.2% during the fiscal year ending March 2020, the second slowest growth rate since 1984. -85.

Industries and commercial plants account for more than half of India's annual electricity consumption, with residences accounting for almost a quarter and agriculture accounting for more than a sixth.

Moody's rating unit ICRA expects annual energy demand to drop for the first time during the year ending March 2021, while losses at state power distribution companies (DISCOM) will increase to $ 500 billion. rupees ($ 6.6 billion).

Except for two mountainous states in the northeast of the country with little industrial load, energy use fell in all regions, according to the data. Consumption in the industrial states fell sharply, with states like Gujarat and Tamil Nadu registering a drop of around 30%, while those of Maharashtra fell more than 20%.