India's Electricity Generation Drops 14.3% in May

India's electricity generation in May dropped at a slower pace than in April, as higher temperatures lead to greater demand for residential power and the government relieved some lockdown restrictions to control the spread of the coronavirus.

Overall electricity generation fell 14.3 per cent in May, a Reuters analysis of provisional government data showed, compared with a decline of 24 per cent in April.

In spite of higher consumption by residential consumers, power use was lower as many industries and commercial establishments - which account for over half of India's annual consumption - were shut or not operating at full capacity.

Electricity generation from coal - India's primary source of electricity - fell 22 per cent, an analysis of daily load despatch data from POSOCO showed. Coal's contribution to overall electricity generation in May fell to 64.2 per cent, compared with an average of over 70.7 per cent last year.

India's electricity demand is expected to fall for the first time in at least four decades this fiscal year, analysts say, adding to the woes of coal-fired utilities, which were already hurting due to a prolonged industrial slowdown.

Thermal coal imports by India - the second-largest consumer, importer and producer of coal and third-largest greenhouse gas emitter - could fall as much as 18 per cent in 2020 due to lower electricity demand, Anurag Sehgal, an analyst at Noble Resources said, a blow to miners in Indonesia and South Africa.

In the meantime, India's solar power supply grew 12.7 per cent and hydro-powered electricity supply rose 3.6 per cent, while gas-fired power output was 13.8 per cent higher, the data showed. However, wind-powered electricity supply fell 10.8 per cent.

The share of fossil fuels in overall electricity generation in May was 70.71 per cent, compared with 76 per cent the previous year, an analysis of data from POSOCO showed.