NEW DELHI: After three months of decline, short-term power prices increased in September, mainly driven by higher demand and lower generation from renewables, said India Ratings and Research (Ind-Ra) in its report on Tuesday.
Ind-Ra in its October edition of credit news digest on India’s power sector highlighted the trends in the sector, with a focus on capacity addition, generation, transmission, merchant power, deficit, regulatory changes and recent rating actions.
According to the report in September 2018, short-term power prices rallied upwards to Rs 4.69/unit (over September 2017 rate of Rs 4.09/unit), post three months of decline, driven by a higher power demand, lower generation from wind capacities, and scanty rainfall and dry weather in some states in the second half of September 2018.
To meet the short-term power requirement, 5,725 MUs (million units) were traded on the Indian Energy Exchange in September 2018, up 44% m-o-m (month-on-month) and 40% y-o-y (year-on-year).
In September 2018, all-India energy requirements increased 7% y-o-y and available energy increased 7.4%, leaving a power deficit of 0.5% (September 2017: 0.9%). The power supply in September 2018 was met through higher hydro (up 23.5% y-o-y) and thermal generation (up 2.7%).
Although generation from renewables also increased 53.6% y-o-y on account of an increase in installed capacity (20%); generation declined 29.5% m-o-m, driven by lower generation from wind energy. Overall, the total power generation increased 8.7% y-o-y in September 2018, it added.
The lower renewables generation coupled with no new capacity addition in the thermal space led to higher reliance on thermal power, which resulted in an increase in all-India PLF (plant load factor or capacity utilization) to 61.1% in September 2018, compared to 60.7% in the same month previous fiscal.
Thermal generation in September 2018 was supported by an increase in monthly coal production by Coal India (up 3.8% y-o-y) to 40.2MT. Coal inventory at power stations also improved 30.3%.
However, it said the number of power plants with sub-critical level of coal inventory increased to 22 in September 2018 (It was 22 in September 2017), on account of uneven distribution of coal across power stations and prioritised coal supply to central and state power stations.
Source: Press Trust of India