Wanakbori thermal power plant near Ahmedabad city in India's Gujarat state: AFP

The ongoing shutdown to control the spread of Covid-19 in India has resulted in a sharp drop in power consumption, as businesses and industrial sites have remained closed for more than a month. In April it dipped 22.75% to 85.05 billion units compared with 110.11 billion units in the same month a year ago, Press Trust of India reports.

The Indian government imposed a lockdown on March 25 and it was recently extended until May 17. As there was hardly any economic activity in April, the commercial and industrial demand has fallen dramatically.

The peak power demand in April stood at 132.77 giga watts, almost one-fourth less than the 176.81 giga watts used in the same month a year earlier. The peak power demand is the highest energy supply during the day across the country.

A milder summer this year also affected residential power consumption. The mercury usually touches 40 degrees Celsius in most parts of the country at this time of the year, but this year it has been cooler due to nonseasonal rains.

Though the government had partially eased the lockdown measures from April 20 and allowed certain economic activities, particularly in rural areas and non-containment zones, the demand continues to be low as many of these units were reluctant to start due to a labour shortage and travel restrictions.

Industry experts say they hope to see a rise in power demand in the coming days as the government relaxes restrictions on economic activities across the country, and expect temperatures to rise in May. But they believe it will likely take time to reach the power demand levels of last year.

The dramatic fall in demand has affected many power distribution companies as they have not been able to collect payment for 20-25% of the bills they have issued, Economic Times reports.

They claim they are just able to pay salaries to their employees, but cannot find the money for coal and freight charges. Officials fear the situation may become worse as the lockdown has been extended.

Many of these companies have already extended the due dates for payment of electricity bills for their industrial and residential consumers.

State governments are now worried that power plants run by private companies may forfeit bank guarantees or start regulating the power supply, leading to frequent power outages and even blackouts.

The government plans to provide nearly 500 billion rupees ($6.6 billion) as loans to state-owned power distribution companies to tide them over during the demand slump. But the proposal awaits final clearance.

More than three quarters of the electricity generated in India is coal-fired, and the state-owned coal mining firm Coal India is reportedly facing a slump in sales due to low off take by thermal plants.