India Ratings and Research has published the February 2019 edition of its credit news digest on India’s power sector.
The report highlights the trends in the power sector, with a focus on capacity addition, generation, transmission, merchant power, deficit, regulatory changes and recent rating actions.
All-India electricity generation declined 1.5% yoy to 100.4BUs, on account of a 1.0% yoy decline in thermal generation, offset partially by a 7.1% increase in hydro generation. In January 2019, the increase in all-India energy requirements was limited to 1.1% yoy, driven by an elongated winter season. Available energy increased 1.2% yoy, leaving a power deficit of 0.5%. The increase in available energy in January 2019 seems to have further been supported by higher renewable generation of 10.5% yoy to 9.0BUs in December 2018. Ind-Ra expects similar growth to have been registered in January 2019.
In January 2019, short-term power prices remained subdued at INR3.33/kWh, driven by a lower demand from north India on account of the ongoing winters; although the prices increased 4.1% yoy.
In January 2019, thermal plant load factors PLFs declined to 60.5%, due to the lower electricity demand and higher generation from other sources, reducing the reliance on thermal generation. However, PLF for the April-January 2019 period grew 3.0% yoy to 61.06%.
Although no new capacity was added in January 2019 and capacity addition remained weak for the April-January 2019 period as well, India still remains dependent on coal-based power generation with the total coal-based capacity at 197.5GW.
Coal India Ltd’s monthly coal production increased 0.9% yoy to 57.2mt in January 2019. Also, the number of power plants with subcritical levels of coal declined to six in January 2019 from 20 in January 2018 and nine in December 2018, supported by the lower electricity demand, higher generation from hydro and renewables, and a 39.6% yoy increase in coal inventory at power stations to 20.2mmt.