Pri­vate in­vest­ment dips in con­ven­tional power

Resource Digest - - CONTENTS -

In its draft Na­tional Elec­tric­ity Plan, the Cen­tral Elec­tric­ity Author­ity (CEA) makes an in­ter­est­ing ob­ser­va­tion on peak power de­mand to be half of the in­stalled gen­er­a­tion ca­pac­ity by 2022. Low de­mand now marks ev­ery part of the power sup­ply chain – gen­er­a­tion, equip­ment, trans­mis­sion, ac­ces­si­bil­ity. Since this gov­ern­ment came to power in mid-2014, there has been no call for in­vest­ment in con­ven­tional gen­er­a­tion.

The gov­ern­ment ex­pects the plant load fac­tor (PLF or oper­at­ing ra­tio) of ther­mal power units to come down to around 55 per cent in five years from the cur­rent 69 per cent. “If re­new­able ca­pac­ity comes up as en­vis­aged, I think we are com­fort­able with a PLF around 50 per cent,” said a se­nior power min­istry of­fi­cial.

Close to 50,000 Mw of coal-based ca­pac­ity is un­der con­struc­tion, of which 20,000 Mw is be­ing built by NTPC alone. The project pipeline for the pri­vate sec­tor is al­most empty af­ter 2017. There is likely to be con­sid­er­able slip­page in the ca­pac­ity ad­di­tion tar­get in re­spect of hy­dro and nu­clear power in the 12th Plan pe­riod (2012-17), as per the Na­tional Elec­tric­ity Plan of CEA.

Dur­ing the first three years of the 12th plan, the pri­vate sec­tor con­trib­uted 63 per cent to the record to­tal ther­mal power ca­pac­ity ad­di­tion of 57,719 Mw. With no state com­ing for­ward to sign long-term power pur­chase agree­ments (PPAS), these in­vest­ments are likely to be hit. The lat­est PPA signed was by Ut­tar Pradesh in 2016, when rates touched `5 a unit, from `3.9 a unit in 2014. Debt-rid­den state power dis­tri­bu­tion com­pa­nies lack the funds to buy sur­plus power.

“My cur­rent ca­pac­ity is not find­ing tak­ers and PLF con­tin­ues to fall. So, how can I in­vest more? There is no pos­i­tive projection on power de­mand and dis­tri­bu­tion re­forms are yet to fruc­tify. I am as­sum­ing a three-year down cy­cle, at least,” said the chief ex­ec­u­tive of a lead­ing pri­vate gen­er­at­ing com­pany.

The in­creas­ing risk in long-term power sale is push­ing de­vel­op­ers to sell in the spot mar­ket at half the rate they quote in bid­ding for PPAS. This has led to spot power prices spi­ralling down to `2 a unit. To turn around the ail­ing dis­tri­bu­tion sec­tor, the Cen­tre an­nounced an Ujwal Dis­coms As­sur­ance Yo­jana. So far, 18 states have joined, agree­ing to im­prove their en­ti­ties, fi­nan­cial and com­mer­cial sta­tus. Rat­ing agency CRISIL says the dis­coms re­quire cap­i­tal in­vest­ment of `3 lakh crore be­tween 2015-16 and 2018-19, of which half is tied up.

“The dis­coms have to bring down AT&C (ag­gre­gate tech­ni­cal

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.