Utilities & Renewables Sector Update : Generation up 2% YoY in April by Elara Capital
Generation up 2% YoY in April
In April 2025, power generation rose ~1.9% YoY to 159bn units (BU) despite high base of 10% YoY. Coal-based generation declined 3% YoY to 116BU while hydro and renewable generation grew 19% YoY and 33% YoY to 10BU and 23BU, respectively. Peak demand increased 5% YoY to 235GW, and the plant load factor (PLF) for coal-based plants dipped to 73.0% from ~76. 8% a year ago. As on March, total installed capacity stood at 475GW, with renewables accounting for 36%, including 105GW of solar and 50GW of wind. During the month, 3,455MW of renewable energy tenders were issued, including a 2,000MW standalone pumped hydro tender by Uttar Pradesh Power Corporation (UPPCL) and a 250MW firm RE tender by Tata Power while 2,040MW of Engineering Procurement and Construction (EPC) tenders were floated and 754MW was allocated to developers.
Power generation increases 2% YoY on high base: Power generation rose ~1.9% YoY in April 2025 to 159BU. This came on high base when generation increased 10% YoY to 156BU. Coal-based generation shrank 3% YoY to 116BU and hydro rose 19% YoY to 10BU. Renewables generation soared 33% YoY to 23BU.
Peak demand up 5% YoY: Peak demand increased 5% YoY to 235GW in April 2025. PLF of coal-based plants stood at 73% in April 2025 vs ~76.8% in April 2024. Installed capacity for power generation stood at 475GW as on March 2025 with renewables constituting 36% of installed capacity. Installed capacity for solar stands at 105GW and for wind at 50GW as on March 2025.
Renewable energy tenders of 3,455MW issued in April 2025: About 3,455MW of RE tenders were issued in April 2025. UPPCL issued a 2,000MW standalone pumped hydro storage tender. Tata Power issued a 250MW firm and dispatchable RE tender. About 2,040MW of EPC tenders were issued. A total of 754MW of RE was allocated to various developers.
Our view: regulated, renewables and hydro firms attractive: Despite stock price correction in the range of 15-20% in the past four months, we do not see any significant potential upside for private firms. We prefer regulated PSU companies, such as NTPC and Power Grid Corporation of India, due to their assured returns from regulated assets and robust capacity addition pipelines. We also favor Indian Energy Exchange , given the rising share of short-term power markets in India and the increasing dominance of power exchanges. CESC offers potential upside from current levels, driven by its significant renewables capacity expansion target while NLC appears attractive with plans to double its regulated equity by FY30. In the long term, the hydro sector looks promising due to upcoming capacity addition and renewed focus on the industry.
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