Ca­pac­ity Util­i­sa­tion at Coal-fired Power Plants In­creases by over 60%

The Economic Times - - Economy: Macro, Micro & More - De­b­joy.Sen­gupta @times­

Kolkata: Ca­pac­ity util­i­sa­tion of coal-fired power plants has risen to 60.5% in De­cem­ber from a low of 52% in Au­gust, a sig­nif­i­cant growth af­ter years of de­cline, of­fi­cial data shows.

Plants owned by states saw ca­pac­ity util­i­sa­tion jump al­most 18.5% dur­ing the same pe­riod in 2016 against a small 5.7% growth in the cor­re­spond­ing pre­vi­ous pe­riod, data from the Cen­tral Elec­tric­ity Author­ity showed. An­a­lysts say power plants may find it dif­fi­cult to repay debts if ca­pac­ity util­i­sa­tion falls below 60%.

Ther­mal ca­pac­ity util­i­sa­tion had fallen ear­lier in the year as good mon­soon rain­fall re­duced agri­cul­tural de­mand and in­creased hy­dro­elec­tric sup­ply. “Hy­del power is way cheaper than ther­mal power and dis­tri- bu­tion com­pa­nies pre­fer hy­del power since it re­duces their costs,” said Ra­jesh K Medi­ratta, direc­tor-busi­ness devel­op­ment at In­dian En­ergy Ex­change. Spot prices had fallen to about ₹ 2 per unit, he said.

San­tosh Kamath, part­ner at KPMG in In­dia, said higher hy­del gen­er­a­tion hits power plants of states be­cause they charge higher tar­iffs than cen­tral sec­tor sup­ply.

“This mon­soon, distri­bu­tion com­pa­nies bought more hy­del power and dras­ti­cally re­duced state sec­tor power in­take. As mon­soons ended, they re­stored their pur­chase from the state sec­tor lead­ing to the 18.5% growth,” he said.

“Nev­er­the­less, a 60.5% ca­pac­ity util­i­sa­tion for coal-fired plants may be com­fort­able in de­vel­oped coun­tries but it may not be so in In­dia spe­cially with plants that do not have longterm sup­ply agree­ment with con­sumers,” he said.

Cen­tral State Pvt All 80 70 60 50 40 Cen­tral State All Pvt

Source: CEA

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