India Ratings and Research (Ind-Ra) has published the January 2020 edition of its credit news digest on India’s power sector. The report highlights the trends in the power sector, with a focus on capacity addition, generation, transmission, merchant power, deficit, regulatory changes and the recent rating actions by Ind-Ra.
In January 2020, all-India energy demand increased 3.5% yoy to 105.3 billion units, after declining for five consecutive months on a yoy basis. All-India energy supply also increased 3.6% yoy in January 2020, resulting in the energy deficit remaining at 0.5% (January 2019: 0.5%). The energy demand for the period April 2019-January 2020 was higher by 1.33% compared to April 2018-January 2019.
With the pickup in demand, electricity generation (excluding renewables) also increased 2.0% yoy to 102.9BU, backed by an increase in thermal (0.5% yoy), hydro (17.0% yoy) and nuclear (7.6% yoy) generation. Thermal Plant Load Factor (PLF) improved on a mom basis to 57.6% in January 2020 (December 2019: 54.4%; November 2019: 51.6%), but fell on a yoy basis (January 2019: 59.7%) due to increased generation from hydro renewable power and nuclear power. Central and state sector PLF decreased to 66.4% (74.5%) and 51.5% (56.2%), respectively, while private sector PLF increased to 55.8% (51.8%).
The short-term power price at Indian Energy Exchange was lower at INR2.86/kWh in January 2020 (January 2019: INR3.33/kWh), as the difference in buy and sell bid volumes widened to negative 5,954MUs (negative 2,788MUs). However, the traded volume on short-term power market showed an increasing trend (January 2020: 4,792MU; December 2019: 4,333MU; November 2019: 3,389MU), on account of favourable prices on the exchange for both the distribution companies and open access buyers..
The coal production by Coal India Limited increased 10.3% yoy to 63.1 million tonnes (mt) in January 2020, owing to higher production at its key subsidiaries – Mahanadi Coalfields Limited (up 18.6% yoy), South Eastern Coalfields Limited (up 14.3% yoy) and Central Coalfields (up 13.9% yoy). However, coal production over April 2019-January 2020 was still down 3.9% yoy to 451.5mt, due to an extended monsoon and protests by employees in some of the mines. The coal inventory at thermal power stations rose 71.5% yoy to 34.7mtpa, due to higher coal production and a higher reliance on hydropower. Coal availability at pithead and non-pithead plants on 31 January 2020 remained at 11 days and 22 days, respectively.
Transmission line addition has been lower in FY20, with 9,594 circuit kilometres (km) added till January 2020 (April 2019-January 2020: 16,321 circuit km) though the transmission line addition in January 2020 was higher at 1,757 circuit km (January 2019: 1,347 circuit km) with 65% of addition coming from the central sector.