India Ratings and Research (Ind-Ra) has published the April edition of its credit news digest on India’s power sector. The report highlights that in March 2018, short-term prices on the exchange increased sharply to INR4.02/unit (February 2018: INR3.23/unit) due to increase in demand associated with seasonal variation, inadequate availability of coal with the thermal generators along with a y-o-y decline in nuclear and hydro power. In March 2018, all India energy requirements increased 6.6 per cent y-o-y to 105.2 billion units (BUs), while available energy increased 6.1 per cent y-o-y to 104.4BUs, leaving a power deficit of 0.8 per cent in March 2018 (March 2017: 0.4%).
The increase in demand was met through improved generation from coal-based thermal power (up 5.3% y-o-y) in March 2018. All India electricity generation (excluding renewable sources) grew 3.1 per cent y-o-y to 105.8Bus in March 2018. During FY18, electricity generation grew 4 per cent y-o-y. The increase in coal-based thermal power was accompanied by a y-o-y improvement in the thermal plant load factor (PLF) to 65.3 per cent in March 2018 from 63.1% in March 2017. The rising power demand is also being met through increasing the generation from renewables.
Total renewable generation improved substantially by 30.8 per cent y-o-y to 7.5BUs in February 2018 on account of improved generation from wind and solar sectors, due to higher capacities and marginal improvement in PLFs. In March 2018, coal production by Coal India Limited rose 9.4 per cent y-o-y to 72.3 million tonnes (mt). With the increasing coal production, coal stock at 113 power plants witnessed an upward movement at end-March 2018.
Coal stock improved to 16.3mt (97.4% domestic, 2.6% imported), up 3.8 per cent m-o-m as on 31 March 2018. Although the overall coal inventory level increased at end-March 2018, the number of plants with critical and supercritical levels further increased to 28 from 20 in February 2018, due to non-uniform distribution of coal across plants throughout the country.