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India's energy demand is expected to improve in July 2021, given the settling down of the second Covid wave and re-opening of commercial establishments, India Ratings and Research (Ind-Ra) said in a report.

According to the ratings agency, the demand continued to see a recovery in June 2021 on a year-on-year basis.

However, this will be below the pre-pandemic levels, due to the extension of Covid-19 restrictions, especially in southern states.

"The southern states saw only a marginal increase of 1.9 per cent YoY of energy requirement during the first 20 days of June due to strong restrictions, given the higher cases than the rest of India."

"Overall, the all-India energy demand met during the first 20 days of June was 74.4 billion units (June 2020: 69.7 billion units; May 2019: 79.6 billion units). Given the energy deficits remaining close to nil, Ind-Ra estimates power demand to increase by 7-7.5 per cent YoY in June 2021."

In May 2021, the all-India energy demand was higher by 7.5 per cent YoY at 110.4 billion units due to a lower base effect, however lower on a monthly basis due to the Covid-19 led restrictions put out by certain states during the month.

"The short-term power price at Indian Energy Exchange fell to Rs 2.83 per kWh in May 2021 on account of an increased gap in the demand-supply of power in the short-term of negative 4,641MUs."

"The electricity generation increased 8 per cent YoY to 103.96 billion units in May 2021 supported by 12.8 per cent YoY growth in thermal generation. Electricity generation from renewable sources increased 10.3 per cent YoY to 14.1 billion units in May 2021, with both wind and solar generation increasing 12.4 per cent and 12.6 per cent YoY."