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Published on 27/05/2020 2:40:40 PM | Source: Motilal Oswal Financial Securities Ltd

Power and Coal Monthly Sector Update by Motilal Oswal

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Power demand slumps post nation-wide lockdown

Coal-based generation down ~32% YoY; Coal stocks remain high

Conventional generation down ~25% YoY in Apr’20

* Conventional generation decreased 25% YoY in Apr’20, largely due to lower demand from Industrial and Commercial consumers given the nationwide lockdown implemented in the wake of COVID-19. The slump in demand was broad-based and was witnessed across states.

* Coal generation was down ~32% YoY and bore the brunt of the overall decline. Hydro generation decreased ~13% YoY. On the other hand, Gas (+19% YoY) and Nuclear (+26%) generation registered positive growth.

 

Total generation down ~23% YoY in Apr’20

* Including RE, Total generation was down 23% YoY. RE generation grew 6% YoY, largely reflecting the benefit of must-run status. Within RE, solar generation was up 15% YoY while wind generation declined 8% YoY.

 

Coal stocks at plants rise to 31 days

* Coal stocks at power plants rose amidst muted power demand. While Coal India cut back on production largely to match off-take, the sharp decline in coal-based generation meant that stocks at power plants remained high. Stocks at power plants stood at 51mt (at 31 days of consumption) at end-Apr’20.

 

IEX volumes decrease

* DAM volumes were down by ~8% in Apr’20. On TTM basis, DAM volumes on the IEX are ~2% lower. Prices declined 2% MoM to INR2.42/kWh in Apr’20.

 

NTPC: PAF remains healthy amid abundant coal supply

* With improved domestic coal availability, plant availability factors at NTPC’s critical plants (such as Sipat, Korba and Talcher, which were impacted by coal supply disruption in the previous year) have recovered. PAF at these critical plants stand at >90% for the month and well above normative levels of 85%. PLF at NTPC plants though declined sharply and stood at ~55% for the month.

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