Coronavirus impact: Power demand falls 20%, discom revenues to be hit

Power engineers write letter to PM Modi seeking moratorium on payments

Following the sharp dip in the energy demand owing to the continuing industrial and commercial shutdown to contain the spread of pandemic coronavirus, the revenue of state power distribution companies (discoms) is expected to be adversely affected and this wll further worsen their already precarious financial condition.

At a pan-India level, the power demand has already fallen by more than 20 per cent to 1,21,937 megawatt (mw) from 1,54,045 mw, while the power supply also crashed to 29,750 lakh units (LU) from 35,650 LU.

All India Power Engineers Federation (AIPEF) chairman Shailendra Dubey said the energy demand had fallen considerably in the country, which posed a serious challenge to the commercial viability of these discoms, most of which are state owned and operated.

“We have written a letter to Prime Minister Narendra Modi and the union energy minister seeking moratorium on the payment under the power purchase agreements (PPA) signed with the power generating companies during the entire lockdown period, since the energy requirement has gone down significantly and these payments are elements of a fixed cost for the discoms,” Dubey told Business Standard in Lucknow, on Wednesday.

If the relief is not extended to the discoms urgently, they would not be able to pay salaries to their staff since the power consumers, especially those belonging to the lower strata, have not being paying their electricity bills due to the lockdown, he informed.

Following the gradual lockdown announced across the different states, the energy demand has fallen due to the total shutdown of high power consuming sectors of industrial, commercial and railways operations, thus affecting the major source of discoms’ revenues.

According to the Northern Region Load Dispatch Centre (NRLDC) website, the power demand in the region had drastically fallen by more than 11,000 mw from 41,253 mw to 30,563 mw in five days. The power supply on Tuesday stood at 6,950 LU compared to 8,660 LU on March 20.

In Punjab, power demand came down to 2,900 mw on Tuesday from 5,000 mw on Friday, with the power supply getting reduced to 700 LU from 1,050 LU. There is a sharp dip of 350 LU per day which was consumed by Railways, industry and commercial establishments as well and the daily revenue loss is estimated at Rs 20 crore a day for Punjab State Power Corporation Limited (PSPCL).

Similarly in Haryana, power supply on Tuesday stood at 850 LU against 1,175 LU on March 20. The power demand fell to 3,800 mw from 5,800 mw over the past five days with the state discom witnessing revenue loss of nearly Rs 18 crore a day.