Thermal power plants record 2% dip in electricity generation

Electricity generation by thermal power stations declined 2.15 per cent during April-October of this financial year compared with the corresponding period of FY19.

Data collated by the Central Electricity Authority (CEA) showed that total generation from thermal power producers fell from 627.19 billion units (BU) to 613.55 BU.

While electricity output from the thermal power stations subsided, nuclear energy and hydro power recorded spike in production. Generation from nuclear plants rose 27 per cent whereas hydro power was up by 16 per cent. Imports from Bhutan soared 21.8 per cent in the period.

Overall electricity generation in the country from all sources inched up 1.15 per cent till October end.

However, electricity generation has trailed the targets in the period under review by 12.88 per cent. While 115.46 BU of electricity was envisaged to be produced from all sources till October, actual achievement is only 113.51 BU.

According to a report by CARE Ratings, the share of thermal power in the overall power generation has dropped to its lowest level since 1991-92 at 72.8 per cent during the current financial year. Hydro power and Nuclear power generation peaked to multi-year highs during the fiscal and along with renewable, constituted 27 per cent of the total power generated in the country. Power generated from small hydro and non-grid solar-rooftop has also contributed to the fall in demand for grid-based power.

Power sector has witnessed some of the widest range of reforms over the past five years. The reforms included Ujjwal Discom Assurance Yojana (UDAY) for de-leveraging and improving financial performance of discoms, Pradhan Mantri Sahaj Bijli Har Ghar Yojana or SAUBHAGYA scheme to improve last-mile connectivity and SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) to provide fuel-supply linkage to power generators. Despite these measures, the sector continues to remain under stress with below-par utilization of power generation assets, continued under performance of considerable number of state discoms (electricity distribution companies) and resultant stress on the entire sector. Among leading indicators of stress in the sector, outstanding payment by discoms to central, state and private power generators including renewable power generators is Rs 84,445 crore as of October, 2019.

“The overall growth in demand for power has fallen to its lowest level in the last decade mainly on account of slowdown in industrial activity. Power-intensive industries like automobile and cement have witnessed broad-based slowdown during the year, which has impacted the demand for power. Additionally, growth in generation from non-grid renewable power has also led to some slowdown in demand for grid-based power”, noted the report by CARE Ratings.

Commenting on the outlook for power sector, the report said, “We expect recovery in growth in demand for power during December-March period. We revise growth estimates for power generation to 1-3 per cent for FY 2020 from our earlier estimate of 5-6 per cent, on the back of slowdown across manufacturing industry”.

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