 "thermal power plant")
India's total plant load factor (PLF) or capacity utilisation of thermal plants is expected to rise to 65.1 per cent this fiscal over 64.2 per cent in the preceding financial year (FY) 2022-23, according to Icra.
In its latest report, Icra projected the all-India thermal PLF level to improve to 65.1 per cent in FY2024 led by the growth in electricity demand and limited thermal capacity addition.
Its outlook for the thermal power segment is also stable, supported by the healthy improvement in the thermal PLF, coupled with the reduction in dues from state distribution utilities (discoms), following the implementation of the late payment surcharge (LPS) scheme, the ratings agency said on Wednesday.
"The rating agency projects the full-year demand growth for FY2024 at a modest 5.0-5.5%, slightly lower than its expectation for the GDP growth for this fiscal (6 per cent), with unseasonal rains having dampened demand over the past two-and-a-half months," it said.
However, the demand is expected to recover from the second half of May 2023. Moreover, the likelihood of El Nino in FY2024 may have a positive impact on electricity demand.
While the estimated demand growth for FY2024 is higher than the historical average seen over the past 10 years, it is lower than the peak of 9.6 per cent reported in FY2023, which was supported by a severe heat wave, favourable base, and a revival in economic activity.
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The rating agency expects a sustained growth in electricity demand to improve the visibility on the signing of new power purchase agreements (PPAs) for the thermal IPPs.
The average spot power tariffs in the day ahead market (DAM) of the Indian Energy Exchange remained high at Rs 5.9 per unit in FY2023, owing to the sharp demand growth, coal supply constraints, and high open market coal prices.
The prices are expected to moderate in FY2024, with improved coal supply and moderation in demand growth, the tariffs are likely to remain higher at Rs. 4.5/unit against a long-term average of Rs 3-3.5/unit.
Further, the coal stock level for the domestic power plants is satisfactory at 13 days as on May 15, 2023, against 8 days in the corresponding period of the previous year.
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