Power generation companies ended the September quarter on a mixed note, with tight fuel supplies and a spike in prices in the spot electricity market. Total generation increased 4.4%, less than the 5.3% rise witnessed in the year-ago quarter. Thermal power generation, the largest source of electricity in India, increased just 2.2% compared to 8.4% in the year-ago period.
On the positive side, utilization levels continued to perk up. Average plant load factor of the thermal power sector crossed 61% last month. In the six months to September, utilization levels stood at 60.7%, compared to 59.2% last year and 58.8% in 2016. Also, hydropower generation has seen a remarkable pickup last month with an increase of 23%. Generation during the September quarter is higher by 14.8%, compared to a 3.7% fall in the year-ago period.
The improving utilization levels should please industry participants. Huge capacity additions in earlier years sent thermal power plant utilization levels to sub-optimal levels, clouding the earnings outlook. Read More