India’s power demand is now expected to grow 8-10% in FY22, HDFC Securities said.

The brokerage previously predicted a 12% increase in electricity demand in FY22.

Also read: India needs 18GW of extra capacity to meet power purchase obligation standards by 2030: Icra

As a result, the downward revision to demand expectations is largely due to a prolonged winter and demand disruptions caused by the increase in corona cases in January 2022.

Notably, aggregate demand increased by 9.5% on an annual basis (YoY) during the “YTDFY22” period.

“The Electricity Amendment Bill 2021 is now delayed as the Center removed the DBT on Electricity Subsidies, in addition to dropping the provision to create a new contract enforcement authority. electricity,” HDFC Securities said in a report.

“However, with the CCEA’s approval of the reform-related package of Rs 3.03 lakh crore, we can expect an improvement in the Capex infrastructure of discoms over the next 3 to 4 years. This would reduce, in our view, the ‘AT&C’ losses, would negate the ‘ACS-ARR’ gap, and promote private participation in the discom space.”

According to the report, electricity demand only increased by 2.5% on an annual basis last month due to low temperatures at the start of the winter peak.

“During the BAT (month-to-date) period from January to 22 also, demand growth was 1.5% year-on-year, mainly due to a partial lockdown imposed in all states due of the increase in Covid cases,” the report said.

“Falling electricity demand and improving coal supply have led to a ‘3x’ increase in coal inventories at power plants from the critical level of October 21.”

According to the report, coal shipments to the power sector jumped 41.5% year-on-year to 63.3 MT on December 21.

“The basic deficit increased slightly to 0.4% on Dec 21, while the maximum deficit fell to 0.1% from 0.6% MoM, with the merchant rate at INR 3.2 per unit.”

Further, he cited that in January 2022, unpaid discom dues increased to Rs 1,066 lakh crore

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