Thermal Power Plant Capacity Utilisation Projected To Improve To 65.1% In FY24: ICRA
The likelihood of El Nino in FY24 may have a positive impact on electricity demand.
India's total plant load factor or capacity utilisation of thermal plants is expected to rise to 65.1% this fiscal over 64.2% in the preceding financial year 2022-23, according to ICRA.
In its latest report, ICRA projected the all-India thermal PLF level to improve to 65.1% in FY24 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, following the implementation of the late payment surcharge scheme, the ratings agency said on Wednesday.
"The rating agency projects the full-year demand growth for FY24 at a modest 5-5.5%, slightly lower than its expectation for the GDP growth for this fiscal (6%), 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 FY24 may have a positive impact on electricity demand.
While the estimated demand growth for FY24 is higher than the historical average seen over the past 10 years, it is lower than the peak of 9.6% reported in FY23, which was supported by a severe heat wave, favourable base, and a revival in economic activity.
The rating agency expects a sustained growth in electricity demand to improve the visibility on the signing of new power purchase agreements for the thermal IPPs.
The average spot power tariffs in the day ahead market of the Indian Energy Exchange remained high at Rs 5.9 per unit in FY23, owing to the sharp demand growth, coal supply constraints, and high open market coal prices.
The prices are expected to moderate in FY24, with improved coal supply and moderation in demand growth, the tariffs are likely to remain higher at Rs. 4.5 per unit against a long-term average of Rs 3-3.5 per unit.
Further, the coal stock level for the domestic power plants is satisfactory at 13 days as on May 15, 2023, against eight days in the corresponding period of the previous year.