INSUBCONTINENT EXCLUSIVE:
is improving with tapering capacity additions and accelerated retirements of old capacities
This also reflects in the improving plant load factor (PLF), or capacity utilisation in FY18, and a rebound in merchant tariffs.
From their
2017 lows, of Rs 2.5 last July, tariffs have rebounded to Rs 3.7 per unit average price in June
Similarly, after seven years of decline, industry PLF improved by 100 basis points yearon-year to 51 per cent (excluding renewables) and by
100 basis points to 58 per cent in case of only thermal (coal and gas) power capacities.
Gross conventional capacity additions are also
It peaked in FY13 at 24 GW
retirement of 1.5 GW in each of the last two years
While the incremental supply is tapering, demand is estimated to gradually inch higher in the coming years
Industry experts expect the demand growth to be at 6.3 per cent for the next three years, compared to 5.6 per cent in the last three
years.
This improving demand-supply situation would be a positive for the listed power companies such as JSW Energy, CESC, NTPC, Coal India
Unlike several other power utilities that are under stress due to high debt or lack of fuel availability, these companies are well placed
