Power Output Up, Low Coal Stock An Issue: India Ratings

Power Output Up, Low Coal Stock An Issue: India Ratings

Power demand and generation has improved in May, but declining coal stock may lead to power shortage, India Ratings said in a report.

“Power demand in May 2017 increased 6.3 per cent year on year to 105.5 billion units (BUs). Even after the sharp increase in year on year demand in May 2017, India was able to manage the power deficit at 0.6 per cent in May 2017 (May 2016: 0.6%) aided by strong generation growth at 7.3 per cent year on year,” India Ratings said in June edition of its credit news digest on India’s power sector.

According to the statement, among the high energy consuming states over 4 BUs per month, five states have reportedly posted double digit increase in demand.

Demand (year-on-year) increased by around 12 per cent in Maharashtra, 20 per cent in Uttar Pradesh, 12 per cent in Andhra Pradesh, 14 per cent in Telangana and around 11 per cent in Haryana.

It said the increase in power generation was contributed by higher thermal and hydro generation, which increased by 6.5 per cent and 15.7 per cent, respectively.

All-India PLF (plant load factor) for coal and lignite based power plants improved for the first time on a year-on- year basis in last 11 months ended May 2017 to 64.4 per cent (62.2% May 2016).

In terms of the capacity addition, India added around 1.2 GW of coal-based capacity in May 2017. The cumulative capacity addition stands at 3.76 GW during the two months ended May 2017 (largely contributed by coal-based capacity (97%).

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The coal production remained subdued as output by Coal India Limited declined 4.5 per cent year-on-year in May 2017 at 40.7 mt, though coal production increased 6 per cent month-on-month basis.

However, it said May 2017 coal production is substantially low as compared to March 2017 at 66 mt. Coal inventories at thermal power plants further declined 46 per cent year-on-year to 17.7 mt in May 2017 leading to eight plants having critical and subcritical levels of inventory, it added.

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