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Maharashtra’s power demand dropped by 13% in first 8 months of 2020: Report

The report, which was part of an exercise by the finance department to analyse the state’s macroeconomic outlook in the wake of the Covid-19 pandemic, was presented to Chief Minister Uddhav Thackeray and senior cabinet ministers earlier this week.

Written by Sandeep A Ashar | Mumbai | October 8, 2020 3:16:46 pm
Maharashtra’s power demand dropped by 13% in first 8 months of 2020: ReportWorryingly, for policymakers, it shows that electricity use by commercial and business establishments has not witnessed a notable pick up even after lockdown restrictions were eased.

Maharashtra’s electricity consumption — a key barometer of economic activity — dropped by 13 per cent year-on-year in the first eight months of 2020, a government report stated.

According to the report, the state’s total power use was 32301.53 mega units in the January-August period, down by 13 per cent over the consumption during the corresponding period last year.

The report, which was part of an exercise by the finance department to analyse the state’s macroeconomic outlook in the wake of the Covid-19 pandemic, was presented to Chief Minister Uddhav Thackeray and senior cabinet ministers earlier this week.

Worryingly, for policymakers, it shows that electricity use by commercial and business establishments has not witnessed a notable pick up even after lockdown restrictions were eased. Officials said this was an indication that the recovery on the consumption side of the economy remained weak.

Despite relaxations, the report stated that the power consumption by commercial units in the January-August period had shrunk by nearly 32 per cent as compared with the consumption number for the same period last year. Between January and August, commercial units in the state had collectively consumed 842.76 mega units of electricity, as against 1,233.82 mega units during the same period last year.

After recording positive growth in the first two months of the year, commercial power consumption took the first plunge in March, the first month of lockdown, when the demand shrank by almost 28 per cent on a year-on-year basis.

This gap further widened to 49 per cent by April, only recovering slightly in May when the demand was still 48 per cent below consumption in May 2019.

In June, when the government announced its first phase of reopening economic and public activity, the year-on-year commercial power consumption shortfall only narrowed to 44 per cent — 95.23 mega units in June, as compared to 170.25 mega units last June.

Despite further relaxations in July and August, the gap has remained close to the 37 per cent mark.

In August, power use by commercial and business establishments in the state was 92.91 mega units, as against 147.72 mega units last August.

The state has around 20 lakh commercial power connections. Collectively, electricity use by industrial and commercial units in the first eight months of 2020 was 17,251.75 mega units, down 22 per cent over 22,143.9 mega units consumed in January-August, 2019.

Indicating that the production side of the economy was picking up, the government data showed that the year-on-year industrial power consumption, which declined by 65 per cent in April, had recovered some lost ground.

In August, industries used 2,280.59 mega units of electricity, which was just 6 per cent lower than 2,424.35 mega units consumed last August. The state has around 5 lakh industrial consumers.

Expectedly, energy consumption by households grew during the eight-month period with work-from-home instructions in place. According to the report, domestic consumption for January-August was 14,336.63 mega units, up 2 per cent over 14,097.5 mega units consumed during the same time last year.

While segment-wise power consumption numbers for September were still unavailable, the collective power demand during the month was around 14,000 to 14,500 mega units.

Pratap Hogade, president, Maharashtra Vij Grahak Sanghathana, said the normal demand was around 18,000 mega units this time of the year. The state has a total of 3.16 crore registered power consumers, of which around 2.35 crore are domestic.

Hogade, a sector expert, estimated losses suffered by power distribution companies to be Rs 8,000 crore. “Most of it will eventually be passed on to the end consumer,” he said, while adding that consumers were already paying additionally for excess power production.

State Energy Minister Nitin Raut had earlier discussed a plan to bear most of the additional burden on domestic consumers as a relief measure.

While Raut’s department had formulated a proposal in this regard in August, the government is yet to approve it. Sources said the finance department had raised certain queries.

Hogade, whose outfit has staged protests against the delay in rolling out SoP on at least a couple of occasions, said it was high time that the government rolled it out.

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