India Ratings and Research (Ind-Ra) has published the December 2020 edition of its credit news digest on India’s power sector. The report highlights the trends in the power sector, with a focus on capacity addition, generation, transmission, merchant power, deficit, regulatory changes and the recent rating actions by Ind-Ra.
In November 2020, the all-India energy demand increased yoy for the third consecutive month, after declining over March-August 2020; although the improvement slowed down to 3.7% yoy to 97.9 billion units (October 2020: up 11.5%; September 2020: up 4.0%). This was due to the early onset of winters impacting demand from the northern region (up 3.2%; October 2020: up 12.9%) and southern region (down 3.8%; up 3.3%). Even though the energy demand has been recovering, the demand over April-November 2020 came in 5.0% yoy lower (1QFY21: down 15.9%; 1HFY21: down 8.7%).
Electricity generation (excluding renewables) increased 1.9% yoy to 95.3 billion units in November 2020 (October 2020: up 8.9%), owing to 4.1% (up 13.3%) growth in thermal generation, although hydro generation was lower 17.0% (down 10.3%) yoy.
Thermal plant load factor (PLF) increased to 53.0% in November 2020 (November 2019: 51.7%; October 2020: 55.5%) on account of the increased demand and sufficient coal supply at power plants. Central sector PLF decreased marginally to 60.6% in November 2020 (November 2019: 60.9%) while state and private sector PLFs increased to 44.8% (42.8%) and 54.0% (52.0%). The thermal PLF over April-November 2020 was lower at 50.8% (April-November 2019: 56.0%), most impacted by the decline in power demand, given the must-run status of nuclear, hydro and renewables.
Electricity generation from renewable sources in November 2020 increased by 6.9% yoy to 9.2 billion units with wind and solar generation improving 11.6% and 7.4%, respectively. The wind generation has shown 1.1% yoy improvement in April-November 2020 after being lower 17.1% in 1HFY21.
The short-term power price at Indian Energy Exchange decreased yoy to INR2.73/kWh in November 2020 (November 2019: INR2.86/kWh) with a 43% yoy increase in the traded volumes witnessed in the day-ahead market. The short-term price decreased yoy, despite increase in demand in the short-term market, due to a strong supply to match the demand.
The coal production by Coal India Limited (CIL) increased 3.3% yoy to 51.7mt in November 2020 (October 2020: 46.8mt), owing to the higher production at its key subsidiaries – Mahanadi Coalfields Limited (up 19.7% yoy), Central Coalfields Limited (up 10.3% yoy) and South Eastern Coalfields Limited (up 6.6% yoy). The recovery in power demand over April-November 2020 led to a gradual rise in coal offtake over the same period (November 2020: 51.3mtpa; April 2020: 39.06mtpa) and a reduction in coal inventory at thermal power stations (November 2020: 37.4mtpa; April 2020: 50.9mtpa) although it was still higher 47.1% yoy. Despite the recovery in demand, CIL’s coal supply to the power sector was lower 5.3% yoy in April-November 2020 at 292.9 million tonnes.
