• Surplus power generation capacity, enough coal likely to beat summer heat

    The summer of 2017 may not prove as uncomfortable for electricity consumers across India as the season in previous years, thanks to surplus power generation capacity, adequate coal stocks and improved purchasing ability of distribution companies.

    Barring pockets in certain states such as Uttar Pradesh, Punjab and Jammu & Kashmir which lack inter-state transmission connectivity, consumers in most other regions are likely to have sufficient electricity access.

    Generators are looking forward to better utilisation of power plants, resulting in better revenues, as the Meteorological Department has predicted a warmer summer this year. Power prices in the spot market touched Rs 3 per unit in the last week of March, following a sudden spurt in temperatures due to heat wave conditions in most parts of the country.

    The prices have now been settled at about Rs 2.85 per unit with increased supply from underutilised projects, but rates for southern states have risen to Rs 3.65 per unit.

    A senior official in the Central Electricity Authority said states such as Bihar, Telangana, Chhattisgarh and Punjab have made affordable short-term power arrangements for the summer season at an average tariff of Rs 3.5 per unit.

    Haryana, Arunachal Pradesh, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Telangana and Tamil Nadu are among the states that often buy electricity from power exchanges.

    After many years, Uttar Pradesh has tied up short-term power for April and May, and has for the first time begun buying electricity from the spot markets, said the official, speaking on condition of anonymity.

    ICRA Ratings’ sector head Girishkumar Kadam said, “The debt refinancing under Uday scheme is resulting in an improvement in the liquidity profile of the discoms in these states and is likely to improve the ability of the discoms to buy power and pay power generators in a timely manner.”

    Power producers expect better utilisation or plant load factors this summer, said Ashok Khurana, director general of the Association of Power Producers. CEA data shows that plant load factor at thermal plants was 67% in April 2016, 62% in May and 54% in June.

    “The demand is likely to pick up substantially this summer. A 10-15% growth in peak demand led by air cooling based on weather predictions is expected,” said a Mumbai-based analyst, who did not wish to be identified.

    There is adequate power to meet demand and enough coal to produce power, Khurana said, while pointing out that much depends on the financial condition of the states and their intention to buy power. The last mile transmission connectivity in some states may, however, prove a constraint in some states such as Bihar and Uttar Pradesh.

    Twenty seven states and a union territory, representing 97% of discom debt have joined the Centre’s Ujwal Discom Assurance Yojana (Uday) launched in November 2015.

    Rural Electrification Corporation CEO Ritu Maheshwari said the states have derived benefits of Rs 11,900 crore in the nine months since joining the scheme while revenue gap of the discoms in 16 early states has fallen 49 paise from 61 paise and the power technical losses have reduced to 22.5% from 24%.

    Owing to the forecast of above normal temperatures, the power ministry expects power demand in northern region to peak to 56 GW between April and September.

    Electricity demand in the southern region has already peaked to 42 GW while in the western region it has touched 50 GW. The peak demand across the country during the summer is expected to be 165 GW compared to 140 GW at present. Michael Frolik Womens Jersey

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