India's Electricity Generation Down Nearly 2% In July: Report

India's electricity generation declined at a slower pace in July compared with June, provisional government data showed, driven by a recovery in consumption in populous northern and central states. July power generation fell 1.8 per cent, an analysis of daily load despatch data from grid operator POSOCO by news agency Reuters showed, compared with a 9.9 per cent decline in June. In the second half of July, electricity generation declined 3.1 per cent, compared with a 0.6 per cent slide during the first fifteen days of the month.

Prime Minister Narendra Modi has been citing electricity consumption to show there are "green shoots" in the economy. The improvement in power demand in July was largely led by higher consumption by populous states such as Madhya Pradesh, Uttar Pradesh, Bihar, Jharkhand and Rajasthan, the data showed.

Industrial states such as Maharashtra, Gujarat, Delhi, Tamil Nadu, Karnataka and Andhra Pradesh witnessed significant declines in electricity use. These regions are among the most affected by the coronavirus.

The country's factory slump deepened in July as renewed lockdown measures to contain surging coronavirus cases weighed on demand and output, raising the chances of a sharper economic contraction.

Fuel sales - a proxy for oil demand - in July slipped from June, indicating slower industrial activity as high retail prices, floods and renewed coronavirus lockdowns in parts of the country dented demand.

Renewable energy generation fell nearly 20 per cent, mainly due to a 41.6 per cent decline in wind-powered electricity output. Solar-powered electricity production grew 18.7 per cent, compared with 5.6 per cent in June.

Power generation from coal - the country's primary source of electricity - continued to fall in July. However, coal's contribution to overall electricity generation in July rose to 64.6 per cent, compared with 61.6 per cent in June. Gas-fired power output was up 23.5 per cent, the data showed.