The COVID-19 lockdown has significantly reduced electricity demand in India, with peak demand down 40% from typical levels. This has led utilities to generate less power, especially from coal plants, resulting in plant load factors decreasing further. The reduced demand and generation is expected to financially impact power distribution companies and coal plant operators due to lost revenue. Other countries like Italy, Australia, and Canada have also seen declines in electricity usage, coal demand and prices during lockdown periods. Global carbon emissions are forecasted to decline 8% in 2020 as energy consumption falls, which would be the largest annual decrease on record.

1. IMPACT OF COVID-19
LOCKDOWN ON ELECTRICAL
ENERGY SECTOR
TANUSHREE BHATTACHARJEE
PHD SCHOLAR , JAMIA MILLIA ISLAMIA
02-06-2020

2. WORLD'S LARGEST LOCKDOWN AND ITS
CONSEQUENCES FOR THE ELECTRICITY SECTOR
• The world’s largest COVID-19 lockdown has been in place for more than two
months in India where 1.3 billion people are advised to stay at home.
• Most of the offices, large and small-scale industries, commercial
establishments (malls, theaters, supermarkets etc) are ordered to remain
shut to control the spread of COVID-19. Schools, colleges and religious
places are also shut to control the disease spread. Only hospitals, a few
essential industries and a few commercial establishments were allowed to
operate.
02-06-2020

3. INDIA’S PEAK ELECTRICITY DEMAND
• This situation has led to a large reduction in peak electricity demand across the five electricity regions of the country. The
above figure (Figure 1) depicts the all India peak electricity demand for the preceding two weeks. The week (16/03 –
22/03) was a normal week and the week (23/03 – 29/03) was a lockdown week.
02-06-2020

4. INDIA’S ELECTRICITY GENERATION
• The total installed capacity of India as of February
2020 is 369 GW (Coal 198 GW, *Renewable
energy sources (RES) 88 GW and others) and with
the highest peak demand of only 146 GW (24/03)
in the lockdown week, the peak demand is just 40
per cent of the installed capacity.
• Figure 3 shows all-India electricity generation in
million units (MU) for the normal week and the
lockdown week. In the normal week the
generation was as high as 3674 MU on 19/03
(Thursday) and it has reduced to 2,642 MU on
28/03 (Saturday) in the lockdown week i.e. the
electricity generation has reduced by 27 per cent.
02-06-2020

5. ELECTRICITY GENERATION COMPARISON OF
COAL AND RENEWABLE RESOURCES
• With more renewable energy resources added into the
electricity system and the difficulty in switching off the
renewable power, the generation from the fossil fuel power
plants (coal and lignite) has been reduced.
• Figure 4 picturizes the electricity generation from coal and
renewable energy sources for both the normal and lockdown
weeks. With generation from renewable energy sources quite
stable, the generation from coal power plants is significantly
reduced to meet the lesser demand.
• In the normal week the average generation from coal-based
power plants was 2,570 MUs and it has reduced to 1,986 MU
whereas in the corresponding period the average generation for
RES was 341 MU and 284 MU respectively.
02-06-2020

6. ALL INDIA PLANT LOAD FACTOR
• Figure 5 presents the plant load factor (PLF) of Coal
and lignite-based power plants from 2009-10 to
2019-20. As we can observe from the figure, *PLF of
2019-20 (56.40 per cent) is at the lowest in the last
10 years and it is expected to decrease even further
with this lockdown.
• This reduction in PLF indicates there are more coal-
based power plants sitting idle without any electricity
generation. This will have an adverse impact on the
revenue of power plants. As compared to normal
times with this lockdown the utilities are expected to
lose even more due to the idle state of the power
plants.
02-06-2020

7. IMPACT ON ELECTRICITY DEMAND, CASH
FLOWS FOR DISCOMS: ICRA REPORT
• This has adversely impacted the all India electricity demand, given that these segments constitute about 40% of the all India
electricity demand, a statement issued by the ratings firm said.
• ICRA Ratings Group Head and Senior Vice President - Corporate ratings Sabyasachi Majumdar said, "The lockdown imposed by the
government is likely to adversely impact the all India electricity demand, with demand expected to decline by about 20-25% on a
year-on-year basis during the period of lockdown. This would in turn adversely impact the revenues and cash collections for
distribution utilities in the near term, especially given the consumption decline from the high tariff paying industrial and
commercial consumers and likely delays in cash collections from other consumer segments. The revenue deficit for the discoms is
estimated to be about Rs. 130 billion per month, on all India basis. This would in turn adversely impact the liquidity profile of the
discoms, increase their subsidy requirement and lead to delays in payments to the power generation and transmission companies.”
• However, it said that relief measures such as moratorium on debt servicing over a 3-month period as notified by Reserve Bank of
India and expected moderation in the interest rate cycle would be a source of comfort in the near term.
• The under-construction renewable power projects as well as EPC and manufacturing companies in solar segment are likely to face
execution delays because of disruption in supply chain in India and labour availability, following the lockdown.
• This delay in turn would increase the pre-operative expenses and the overall project cost, which in turn would have impact on the
expected returns.
• In this context, the MNRE has notified that time extension can be provided for all renewable energy projects, which are impacted
by the supply chain disruption due to COVID outbreak, under the force majeure clause.

8. THE IMPACTS OF COVID-19 CRISIS ON GLOBAL
ENERGY DEMAND AND CO2 EMISSIONS: IEA
• As a consequence of the efforts to slow the spread of the virus, the share of energy use that
was exposed to containment measures jumped from 5% in mid-March to 50% in mid-April.
Several European countries and the United States was announced that they expect to
reopen parts of the economy in May, so April was the hardest hit month.
• Beyond the immediate impact on health, the current crisis has major implications for global
economies, energy use and CO2 emissions. Our analysis of daily data through mid-April
shows that countries in full lockdown are experiencing an average 25% decline in energy
demand per week and countries in partial lockdown an average 18% decline.
02-06-2020

9. CONTINUED…
• Global coal demand was hit the hardest, falling by almost 8% compared with the first quarter of 2019.
Three reasons converged to explain this drop. China – a coal-based economy – was the country the hardest
hit by Covid-19 in the first quarter; cheap gas and continued growth in renewables elsewhere challenged
coal; and mild weather also capped coal use.
• Oil demand was also hit strongly, down nearly 5% in the first quarter, mostly by curtailment in mobility and
aviation, which account for nearly 60% of global oil demand. By the end of March, global road transport
activity was almost 50% below the 2019 average and aviation 60% below.
• The impact of the pandemic on gas demand was more moderate, at around 2%, as gas-based economies
were not strongly affected in the first quarter of 2020.
• Renewables were the only source that posted a growth in demand, driven by larger installed capacity and
priority dispatch.
• Electricity demand has been significantly reduced as a result of lockdown measures, with knock-on effects
on the power mix. Electricity demand has been depressed by 20% or more during periods of full lockdown in
several countries, as upticks for residential demand are far outweighed by reductions in commercial and
industrial operations.
02-06-2020

10. GLOBAL CO2 EMISSION
• In IEA estimation for 2020, global electricity demand falls by 5%, with 10% reductions in
some regions. Low-carbon sources would far outstrip coal-fired generation globally,
extending the lead established in 2019.
• Global CO2 emissions are expected to decline by 8%, or almost 2.6 gigatonnes (Gt), to levels
of 10 years ago. Such a year-on-year reduction would be the largest ever, six times larger
than the previous record reduction of 0.4 Gt in 2009 – caused by the global financial crisis –
and twice as large as the combined total of all previous reductions since the end of World
War II. As after previous crises, however, the rebound in emissions may be larger than the
decline, unless the wave of investment to restart the economy is dedicated to cleaner and
more resilient energy infrastructure.
02-06-2020

11. POWER SECTOR SITUATION IN LOCKDOWN
COUNTRIES
• Italy
• Thermal power had the largest share of the cumulative installed
capacity in Italy, accounting for 49.6% of the total installed
capacity, including gas with 40.5%, coal for 6.8%, and oil for 2.1%.
It was followed by hydropower and non-hydro renewable. Of the
thermal sources, gas receives the maximum government support.
Non-hydro renewable power, including bio-power, onshore,
offshore and small wind, photovoltaic (PV) and geothermal
accounted for 31% and hydropower for the remaining 19.8%.
• The gas demand in Italy is seeing a decreasing trend. If the current
lock-down situation persists, the domestic gas prices shall fall
further, and the same shall have a proportional impact in Italy’s
electricity price and demand.
• Italy’s monthly peak demand observed during December 2019 to
March 2020 (as of 20 March 2020) was found the lowest
compared to previous two years’ records.
02-06-2020

12. CONTINUED….
• Australia
• Australia is the world’s second largest exporter of thermal coal.
Japan and China are two major export destinations for Australian
thermal coal. Due to Lunar year celebrations and the following
outbreak of the coronavirus in mainland China, China’s demand
for thermal coal was reduced. This sudden decline in demand
from China has influenced the prices of Australian thermal coal
both in overseas and domestic markets. Lower fuel cost leads to
lower delivered cost of electricity in domestic market; and this
shall further cause a decline in the annual revenue realisations
by local power generating companies in 2020.
• Spot thermal coal prices (FOB price at Newcastle Port, Australia)
were initially forecasted to be around $70 per tonne in 2020.
However, due to the slowdown in global demand, the prices
reached $67.5 per tonne in February 2020 and $64.6 per tonne
in March 2020.
02-06-2020

13. CONTINUED….
• Canada
• It is expected that there would not be any significant impact on the Canadian electricity sector due to Covid-19, except that
some of the capacity augmentation or renovation works might get delayed. Canadian Electricity Association has announced that
the electricity sector currently does not face any technical risk.
• In order to facilitate the population that would work from home, Ontario electricity leaders are discussing options such as the
suspension of time-of-use pricing. Also, they are considering introducing tiered-pricing that can control the peak demand spikes
in evening hours. The idea behind the tiered-pricing is to discourage unwanted usage of power during peak times, and instead
try to shift that load to non-peaking times.
• United Kingdom
• The power demand in the UK is estimated at 299 GWh for 2019. Industry leaders believe that the total demand across the
country would fall in coming days due to the Covid-19 outbreak. Fall in total demand will mainly be factored by the
considerable reduction in industrial and commercial demand, which would likely be higher than the increase in domestic
demand as people stay at home.
• Japan
• Japan’s dependency on imported fossil fuels is over 97% for crude oil, LNG and coal. Total electricity consumption in Japan
stood at 945 TWh in 2019. As per initial plans, Japan is expected to start operations of three nuclear reactors in 2020 after
implementation of the safety enhancements.
• Due to the coronavirus pandemic, the country is experiencing a slowdown in industrial activity, which in turn has impacted the
industrial electricity consumption.
02-06-2020

14. REFERENCES
• Balasubramanian Sambasivam, “World's largest lockdown and its consequences
for the electricity sector” in energy.economictimes.indiatimes.com April 2020.
• Covid lockdown to impact electricity demand, cash flows for discoms: ICRA
economictimes.indiatimes.com March 2020.
• iea.org reports on global-energy-review-2020 , April 2020.
• By GlobalData Energy “Covid-19 update: Power sector situation in lockdown
countries” in power-technology.com March 2020.
02-06-2020