Electricity generation from thermal plants stagnates during Apr-Sept period

Electricity generation from the thermal power plants has stagnated during April-September period of this fiscal year.

Data collated by the Central Electricity Authority (CEA) shows that total electricity produced by the thermal power plants inched up only by a modest 0.92 per cent to 534.5 billion units (BU).

By contrast, nuclear and hydro power plants logged 25.5 per cent and 15 per cent growth in electricity production in the same period. The pan-India electricity generation rose by 3.5 per cent to 658.55 BU.

In terms of capacity addition, though, thermal power generation zoomed 4695 per cent to add 3345 Mw during the first half or April-September period of FY20. On the contrary, no fresh capacity was added in hydro and nuclear power. The nationwide rated power capacity from all sources stood at 363.36 Gw at the end of September 2019.

Also, the Plant Load Factor (PLF) of thermal power plants has been consistently declining since the beginning of this fiscal year. From, 63.24 per cent in April, the average PLF of thermal power generators has sunk to 51.05 per cent at the end of September.

According to Fitch Group owned India Ratings & Research, capacity ramp-up in coal-fired thermal power generation is projected to stay subdued both in FY20 and FY21. The tepid growth is attributed to phasing out of 2000 Mw of end of cycle thermal power plants, stress that stalks 85 per cent of the private owned power plants in various stages of construction, squeeze in availability of formal credit, drying of long-term power purchase agreements (PPAs) and slow pace of commissioning of fresh thermal power projects across Central, state and private sectors.

Between FY20 and FY21, power demand is expected to log a healthy growth. However, only a fraction of this incremental demand is poised to be met by the renewable energy sources. Considering the absence of any major alternatives to meet the growth in demand, the proportion of excess capacity in the thermal power sector would decline further during this period.

The slowdown in new thermal capacity addition by the state and central thermal sectors would also support the absorption of the excess thermal capacity over this period. Fresh project starts for thermal projects declined steeply to a mere 1.6 GW in FY19 from an average of 10 GW per year over FY15-FY18.

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