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India's electricity generation falls at slower rate in July

CHENNAI (Reuters) - 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.

FILE PHOTO: A bird flies next to electricity pylons in the old quarters of Delhi, India, April 13, 2020. REUTERS/Adnan Abidi

July power generation fell 1.8%, a Reuters analysis of daily load despatch data from federal grid operator POSOCO showed, compared with a 9.9% decline in June.

In the second half of July, electricity generation declined 3.1%, compared with a 0.6% slide during the first fifteen days of the month.

Prime Minister Narendra Modi has been citing electricity consumption to show there are “greenshoots” in the Indian economy.

The improvement in power demand in July was largely led by higher consumption by populous northern, eastern and central states such as Madhya Pradesh, Uttar Pradesh, Bihar, Jharkhand and Rajasthan, the data showed.

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

India’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.

India’s 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%, mainly due to a 41.6% decline in wind-powered electricity output. Solar-powered electricity production grew 18.7%, compared with 5.6% in June.

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

Reporting by Sudarshan Varadhan; editing by Emelia Sithole-Matarise