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August power demand might have declined due to heavy rainfall, says ICRA


Power demand grew 4.8 percent in August, down from around 5.5 to 6 percent growth in the April-July period.

Power demand grew 4.8 percent in August, down from around 5.5 to 6 percent growth in the April-July period. Sabyasachi Majumdar, senior vice president and group head at ICRA Ratings, says it is very difficult to extrapolate from just one month’s data because power demand as well as generation is a fairly seasonal factor.
“August has been a rainy month and rains have been across the country. This has two impacts – the biggest impact is in the agriculture consumption and domestic sector," he said. The fair amount of total domestic demand goes in cooling applications like fans, coolers, air-conditioners etc, so if the monsoons are good, the cooling requirements are less, noted Majumdar, adding that industrial consumption also may have contributed to the muted demand in August.
In terms of power supply, Majumdar said, “Agriculture and domestic would be close to 40-50 percent and the rest would be other segments like railways and industrial consumers.”
“Over the last couple of years, there has been a lot of investment in rural electrification. Villages were already electrified but a lot of work has been done in terms of bringing the power to rural households as well. Earlier they were not getting adequate hours of supply," he said.
"Our interaction with utilities in some of the northern states does indicate that overall hours of supply have improved. Elections might have been a contributing factor but over the last two-three years, there has been a fair increase in rural offtake as well because of efforts being made for the last mile connectivity in villages,” he further mentioned.

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