In a post-Covid scenario, the slower economic growth will lead to slower electricity demand growth, said The Energy and Resources Institute (TERI), a leading think tank.
TERI has unveiled its analysis in its report ‘Bending the Curve: 2025 Forecasts for Electricity Demand by Sector and State in the Light of the COVID Epidemic’.
This report was launched by the Power and New & Renewable Energy Minister RK Singh on Tuesday at the ‘Virtual Sustainable Action Dialogue on Energy Transition’, a pre-event of the World Sustainable Development Summit, TERI’s annual flagship event, to be held in February 2021.
In order to assess the likely magnitude of this slowdown in electricity demand growth, this TERI report develops 3 scenarios for the Indian economy to 2025.
According to the report, the baseline scenario sees a sharp contraction in Indian GDP in 2020-2021 of 6.4 percent, a rebound of economic growth in 2021-2022 and then a return to the pre-COVID trend rate of economic growth.
The L-Shaped and V-Shaped scenarios represent respectively a more pessimistic and optimistic version of the baseline scenario, it added.
TERI in its report further revealed that, in all scenarios, the 2025 GDP is smaller than in the counterfactual pre-COVID trend scenario, by 7 percent to 17 percent in the V-Shaped and L-Shaped Scenarios, with the Baseline Scenario lying between the two.
However, in all scenarios, 2025 GDP is higher than it is today, but lower than what it would have been by 2025 in a scenario without the Covid-19 shock, it added.
As a result, electricity demand is also lower by 2025 as compared to what it would have been in a scenario without the Covid-19 shock.
In the baseline scenario, the electricity demand for 2025 is 11 per cent below the level it would have been by then without the COVID-19 shock. In the L-Shaped Scenario, electricity demand is 17 per cent below the level of the counterfactual without the COVID-19 shock.
In short, the COVID-19 shock will lead to substantially slower electricity demand growth and a lower level of total demand even several years after the shock.
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