India Ratings and Research (Ind-Ra) has published the April 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 the recent rating actions.
In April 2019,
short-term power prices declined 19.1% yoy to INR3.22/KWh (April 2018:
INR3.98/KWh), though it increased from INR3.12/KWh in March 2019. While energy
demand increased by 6.0 %, energy supply rose by 6.2%. The growth in supply
was supported by higher hydro generation, which led to lower reliance on
According to Ind-Ra, short-term power prices are unlikely to have seen any major movement during May 2019, as the hydro generation would have remained strong due to a better snow season in FY19. Also, coal availability with thermal generators has improved, with coal inventory increasing by 99% yoy to 31.6 million tonnes (mt) in April 2019 (April 2018: 15.9mt). Coal production increased 1.0% yoy to 45.3mt in April 2019.
With the improvement in coal inventory, the number of power stations with subcritical levels of coal inventory decreased to two in April 2019 from 28 in April 2018.
All-India electricity generation (excluding renewables) increased 5.3% yoy to 108.9 Billion Units (BUs) in April 2019 (April 2018: 103.5BUs), as thermal and hydro generation increased by 2% and 48%, respectively. The all-India PLF for thermal power stations rose marginally to 64.7% in April 2019, as private sector PLFs increased by 480bp to 60.1%. The improvement in the private sector PLFs can be attributed to the improvement in Adani Power Limited’s Mundra plant’s PLF owing to the reduction of its coal cost. The PLF of the Mundra plant, which has a capacity of 4620MW, rose to 83.43% in April 2019 (April 2018: 3.88%). The PLFs of the central and state sector declined by 170bp and 300bp, respectively, in April 2019.
In April 2019, as energy supply increased at a slightly higher rate than energy demand, energy deficit and peak deficit narrowed to 0.4% (April 2018: 0.5%) and 0.3% (0.9%), respectively. With the onset of summer season, energy demand increased by 1.4% on a mom basis.
During FY19, 12.1GW of generating capacity was added, driven by an 8.6GW addition in the renewable segment and 3.5GW in the thermal segment. The renewable capacity addition was driven by a solar capacity addition of 6.5GW and a wind capacity addition of 1.6GW during FY19. Despite slower thermal capacity addition, India’s power segment remains reliant on thermal generation, which had a total capacity of 200.7GW as of April 2019.
Data Source: Central Electricity Authority (CEA), Indian Energy Exchange and Coal India Limited
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