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Improved economic activity is expected to raise FY22 power demand by 12 per cent on a year-on-year basis, HDFC Securities said in a report.

According to the report, revival in economic activity and low YoY base triggered an increase in power generation by 10 per cent YoY in July 2021.

"Power generation also increased in most of the states, mirroring the growth in demand. However, power generation declined in Delhi, Punjab, Madhya Pradesh, Jammu and Kashmir and Gujarat. Fall in generation in Gujarat is largely due to a fall in the Mundra plant generation, which is attributable to a steep rise in imported coal prices, making the plant unviable to operate at the current level," it said.

The report also said that the power generation increase was led by strong growth across the coal and renewables (RES) segments.

The plant load factor (PLF) improved for the coal, hydro, nuclear and RES segments, while it fell for the gas segment.

Besides, the month of August witnessed 15 per cent YoY growth in demand and generation until August 15.