Capacity utilisation at coal-fired power plants increases by over 60 per cent
KOLKATA: Capacity utilisation of coal-fired power plants has risen to 60.5 per cent in December from a low of 52 per cent in August, a significant growth after years of decline, official data shows
Plants owned by states saw capacity utilisation jump almost 18.5 per cent during the same period in 2016 against a small 5.7 per cent 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 per cent.
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 distribution 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 Rs 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 per cent growth," he said.
"Nevertheless, a 60.5 per cent 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.
Plants owned by states saw capacity utilisation jump almost 18.5 per cent during the same period in 2016 against a small 5.7 per cent 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 per cent.
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 distribution 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 Rs 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 per cent growth," he said.
"Nevertheless, a 60.5 per cent 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.
