As UDAY Slowly Fizzles Out, Power Demand Still Remains Weak

Lower than expected power demand leads to excess power generation capacity in India.

The Indian economy is going through a massive structural shift.  The demonetization and the GST may well have further contributed to it.  And there is a growth slowdown.  All these developments have led to lower than expected electricity demand.  Moreover, many power plants, have significant unused capacity.  This is a short-term phenomenon no doubt but it has led to utilities slowing down on signing fresh agreements with new power plants and renegotiating old ones.  The renewables sector is in for much trouble if demand does not increase soon.


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