India Ratings and Research (Fitch Group) has published the April 2019 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.
In March 2019, all-India energy generation (including renewables) increased 2.1% yoy, driven by 26.2% yoy growth in hydropower generation and a 13.2% yoy increase in renewable generation, even as thermal energy generation declined 0.9% yoy. As a result, the available energy increased 2.5% yoy compared to the 2.1% yoy increase in the energy requirement, leaving a lower power deficit of 0.4% in March 2019 (March 2018: 0.8%).
In March 2019, the short-term power prices declined 22.4% yoy to INR3.12/kWh, although marginally increased from INR3.08/kWh in February 2019. The lower yoy prices were driven by higher domestic coal availability with power plants.
The higher coal availability was driven by a 9.5% yoy increase in coal production to 79.2 million tonne in March 2019 and 6.9% yoy to 606.9 million tonne in FY19. This led to a 89.6% yoy rise in the coal inventory at power stations to 30.9 million tonne in March 2019 and a decline in number of power stations with sub critical level of coal inventory to 0 in March 2019 from 28 in March 2018. The inventory levels were also supported by higher reliance on hydro and renewable generation to meet the increase in energy demand.
During FY19, 12.1GW of generating capacity was added, driven by an 8.6GW addition in the renewable segment and 3.5GW in the thermal segment. The renewable capacity addition was driven by a solar capacity addition of 6.5GW and a wind capacity addition of 1.6GW during FY19. Despite a slower thermal capacity addition, India’s power segment remains reliant on thermal generation with a total capacity of 200.7GW in March 2019 out of the total generating capacity of 278.5GW.
(Data Source: Central Electricity Authority, Indian Energy Exchange and Coal India Limited)