Economic slump trips State’s power demand for 4th straight month

With the country’s economy going through a serious slowdown, power demand in Tamil Nadu, which has the largest number of industries, has witnessed a fall for the fourth consecutive month in October. The State that is one of the key automobile and auto-components manufacturing hubs has been hit hard by the slowdown, with major companies like Ashok Leyland and TVS declaring production holidays due to fall in vehicle sales. According to data from Central Electricity Authority (CEA), Tamil Nadu’s power demand fell by about five per cent to reach 8,193 million units this year from 8,634 million units last October. Experts attribute the decline to the fall in industrial consumption that was brought about by the slowdown in manufacturing sector.

Like other industrialised states in the country, Tamil Nadu, too, has been witnessing a downward spiral in power consumption since July. State’s power consumption had fallen to 9,648 million units in July when compared to 9,706 million units last year. In August, the State recorded three per cent fall in power consumption. At 10 per cent, the fall in power consumption was the sharpest in September - 8,482 million units in September 2019, from 9,420 million units in last year.

In the six-month period from April to October, 2019, the power demand in the State stood at 65,551 million units compared to 65,699 million units in the same period last year. Tamil Nadu’s peak demand marginally fell in October 2019 – 14,319 MW when compared to 14,333 MW in the same month in 2018.

The scenario is similar in other industrialised states like Maharashtra and Gujarat. Last month, the power demand of Maharashtra declined by 22.4 per cent and in Gujarat by 18.8 per cent, the data from the CEA showed. Barring four small States in the north and east, demand fell across regions, the data showed.

Madras Chamber of Commerce and Industry-Energy chairman S Venkatachalam said industrial power consumption has gone down including Tamil Nadu, like how it has across the country. “Due to overall industrial slowdown, the power consumption has come down. The automobile industry is functioning for only for three to four days a week,” he said.

Explaining the situation, KE Raghunathan, former national president of All India Manufacturers’ Organisation (AIMO), pointed out that Tamil Nadu has four major industry sectors – automobile, tanneries, textile and fireworks, all of which were facing slowdown.

“Automobile industry has been hit over the past year. Ambur-based tanneries sector has come to a standstill owing to the export GST duty drawback. Similar is the case of the textile and its related industries, and also matches, fireworks and printing industries in Sivakasi. This led to fall in the energy consumption in the State,” he said.

However, he added that Tamil Nadu, which should have been among the worst-affected like Maharashtra, has fared better due to the State government’s increased spending on projects.

“For the past year, the State has increased its expenditure on the infrastructure projects due to the Lok Sabha polls and the crucial bypolls to the State Assembly. This increase in spending has helped reduce the impact on the energy consumption caused by the industrial slowdown,” he said, noting that industrial sector slowdown was due to the policies of the Centre.

He said the State government’s decision to purchase vehicles for the Transport Corporations, investment in infrastructure projects like construction of roads, and addition of power capacity, including solar power projects, had a cascading effect on the energy consumption. However, even while admitting that the production holidays and layoffs might have resulted in a decline in energy demand, a senior official from Tangedco contended that these alone were not the reason for the reduction in consumption in the State.

“Various factors could have resulted in power consumption going down in the State. The State had a good southwest monsoon and northeast monsoon this year. This has resulted in a steep fall in the agricultural power demand. The agricultural sector accounts for nearly 10 to 15 per cent of the State’s average power consumption,” the official said.