An Empirical Analysis of the Impact of COVID-19 on the Power Sector of India

Abstract

Emerging economies such as India are highly vulnerable due to the spread of COVID-19. We document the impact of COVID-19 on the power sector in India. We estimate the average energy demand and supply for the Indian states using data from March 23 to September 24, 2020. Our results indicate that transmission and distribution losses were much lower during the initial weeks of lockdown, but increased significantly thereafter. The market-clearing prices and volumes are lower than for the H1N1 influenza pandemic period, negatively impacting investor sentiment. Therefore, energy policies must focus on demand-side measures, apart from liquidity flow.