After four successive months of decline, the power sector in India witnessed a spike in the demand in February. Overall, around 11 per cent increase in power generation was recorded during the month primarily due to availability of coal stocks at power plants and improvement in renewable power generation led by solar power. Demand for electricity also increased in February largely due to a revival in industrial activity. However, that feeling of optimism didn’t last long!
As the novel coronavirus, also known as COVID-19, spreads its wings worldwide, it started impacting the global economy. According to a latest UN trade report, the world economy will go into recession this year with a predicted loss of trillions of dollars of global income due to the coronavirus pandemic. India too could not remain safe from this deadly virus for long.
So far, more than 1,400 COVID-19 positive cases have been reported across the nation. After a “Janata (public) Curfew” observed on 22nd March, Prime Minister Narendra Modi called for a 21-day nation-wide complete lockdown starting midnight 24th March to intensify social distancing in order to mitigate the risk of contracting the infection through community spread. In the absence of any treatment or a vaccine, social distancing has emerged as the most suitable step to arrest the spread of highly contagious coronavirus. However, this will obviously have a deeper impact on the economy and businesses across the sectors are today biting the bullet of lockdown. On the first day of the lockdown, there was a steep fall of around 20 per cent in power demand. It is estimated that the COVID-19 lockdown will cost India around $20 billion.
Well, behind every disaster, there is often a silver lining! On that note, the UN trade report has hinted ‘possible exception of India’ from the upcoming global economic recession. Therefore, at the end of the day, once the dust settles and normal economic activities resume, we see a truly bright future for Indian power sector.