Ray of light! Power demand shows signs of revival in economy

After recording continuous fall in electricity requirement for four and a half months, power demand in the country seems to be gathering steam in the second half of December. As per daily reports on power supply reviewed by FE, electricity demand has been more than in the corresponding days in FY19 since December 16 (see chart). Power demand growth turning positive can be seen as a green shoot for the economy, reviving slowly after a period of lull.

Electricity demand gathering pace should help coal-based power plants, where utilisation levels remained muted in November with average plant load factor (PLF) being only at 51.4%, against 60.5% in the corresponding month last year. Falling electricity use had pushed PLFs to an all-time low of 48.9% in October. Power generators find it difficult to service loans when PLFs run below 60%. As per available data, the lowest annual average thermal PLF was recorded at 52.4% in FY86.