India’s power demand is likely to grow 7% year-on-year in FY24, after growing 7.1% in the first half of this fiscal due to strong industrial activity, a Fitch Ratings report has estimated.
Last fiscal, there was a 9.5% increase in power consumption.
“The strong power demand should keep the average thermal power plant load factor (PLF) above 60%,” the report noted. In the past three months, power demand has increased by about 20% each month, compared to the corresponding months of FY23.
The report noted that thermal coal inventory fell and was sufficient for only 8.4 days in September, against the usual 18 days.
This was despite the government’s efforts over the past six months to maintain adequate coal stocks through increased local supply and higher coal imports.
As demand increased, the power ministry ordered a mandatory 6% blending of imported coal until March 2024, and asked all imported coal-based power plants to operate at full capacity until the end of the financial year this.
The report also noted that regular payments under the central government’s late payment surcharge (LPS) rules have brought down the total dues from distribution companies (discoms) to power generation companies (gencos) by approx. ₹70,000 crore, from ₹1.3 trillion in June 2022, when LPS was launched. “We expect receivable days for Fitch’s rated gencos to shorten in the short term, albeit at a slower rate than the sharp improvement in FY23,” Fitch said.
The long-term sustainability of the better obtainability of loans depends on timely and adequate tariff adjustments, the provision of state subsidies and better operational efficiencies.
Milestone Alert!Livemint tops the charts as the fastest growing news website in the world 🌏 Click here for more information.
Get all Industry News, Banking News and Live Coin Updates. Download the Mint News App for Daily Market Updates.
Less
Updated: 17 November 2023, 11:28 PM IST
Denial of responsibility! greenleaselibrary.org is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – at loginhelponline@gmail.com The content will be deleted within 24 hours.
