Power demand: Forecasts wide off the mark, PLFs seen falling further

For the fifth year in a row, electricity demand in the country trudged below the projection made by the government in FY20. The gap between the forecasts and actual demand persisted, even after the Central Electricity Authority (CEA) apparently scaled down the former a bit, over these years.

With the lower-than-anticipated growth in demand leading to stoppage of many large power generation projects – several of them have turned into non-performing assets –, capacity addition too have slowed. While the pace of thermal capacity addition saw a sudden deceleration since FY16, the renewable energy segment partially offset this trend (see chart).