New Delhi, Jan 28 (IANS): India's electricity generation is likely to improve in 4QFY21 on the back of demand revival and an adequate stock of coal at power plants, India Ratings and Research (Ind-Ra) said in a report.

The ratings agency cited the continued improvement in all-India energy demand during the first 15 days of January 2021, with a 2.4 per cent yoy increase to 52 billion units.

In December 2020, the all-India energy demand increased 4.9 per cent YoY to 106.5 billion units, backed by a strong demand from the northern and western region.

"In January 2021, the peak power demand reached its all-time high of 187.3GW, backed by a revival in economic activities," the report said.

Besides, the report pointed out that improvement in energy demand and the reduced generation from hydro and renewables sources have helped the thermal plant load factor (PLF) increase to 57.1 per cent in December 2020.

In December 2020, the thermal sector's PLFs rose on a YoY basis across the central, state and private sectors, increasing to 63 per cent, 49.7 per cent and 58.9 per cent, respectively.

"Despite showing a YoY improvement during September-December 2020, thermal PLFs over 9MFY21 was lower at 51.5 per cent mainly impacted by a decline in power demand, given the must-run status of nuclear, hydro and renewables."

Accordingly, the short-term power price at Indian Energy Exchange decreased YoY to Rs 2.83 per kWh in December 2020 with a 29 per cent YoY increase in the traded volumes witnessed in the day-ahead market.

"With an improvement in demand, the price in the day-ahead market has increased to Rs 3.17 per kWh in January 2021 till date."

Additionally, the report said the production by Coal India was higher by 0.5 per cent YoY to 58.3mt in December 2020.

"The recovery in power demand over April-December 2020 led to a gradual rise in coal offtake over the same period and a reduction in coal inventory at thermal power stations, although it was still higher by 18.8 per cent YoY,"

"Despite the recovery in demand, CIL's coal supply to the power sector was lower by 5.3 per cent YoY during April-December 2020 at 318.0 million tonnes."

However, there was a lower addition of transmission line at 12,921 circuit kilometres (km) over 2020.

"The length of transmission lines added in December 2020 was also lower at 655 circuit km, with 58 per cent addition coming from the state sector."