Sustained energy demand recovery absent: ICRA

The recent uptrend in the electricity demand growth has led to a marginal improvement in the all India thermal PLF to 59.9 per cent for the first five months of FY2018 as against the reported PLF of 59 per cent in the corresponding period of the previous year.

The Government of India (GOI) has recently launched Saubhagya scheme with a thrust on rural electrification, which will improve an energy demand in the near to medium term in ICRA’s view, if the scheme is implemented in a timely manner. However, a sustained demand recovery is still absent and thus, energy demand growth from the relatively high tariff paying industrial and commercial segments remain critical for both the state distribution utilities and IPPs. Also, the stressed thermal capacity (in private IPP segment) remains sizeable at about 60 GW, despite the various policy level initiatives undertaken by the GoI.