Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 4.0
Article rating: No rating
Article rating: 2.0
Article rating: 1.5
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 1.0
Article rating: No rating
Article rating: No rating
RSS

News

India may produce surplus power this fiscal: Fitch Ratings

Author: IANS/Monday, September 11, 2017/Categories: Energy

India may produce surplus power this fiscal: Fitch Ratings

New Delhi - Subdued demand growth, consistent capacity additions and better networks may result in India producing surplus power in the current fiscal, although sporadic outages continue and 24% households are yet to be electrified, according to the latest report by Fitch Ratings.

The American agency said in its newsletter "India Power Watch" that India could actually produce a power surplus in this fiscal, with an energy deficit of just 0.6% in the first quarter ended March, which is a period of high seasonal electricity demand.

"However, in reality, sporadic outages continue to plague the country. At the same time, about 24% of households are yet to be electrified in India," it said.

Fitch said the inability of hugely indebted power distribution companies (discoms) to purchase power, along with the absence of adequate transmission network coverage, exerts significant pressure on India's thermal power utilisation.

The cost-revenue gap remains at Re 0.42 per kilowatt hour (kWh) along with aggregate technical and commercial (AT&C) losses of 20.6% overall.

"Improving these operational inefficiencies will drive any sustainable improvement," it said.

The report noted that electricity prices at power exchanges dropped by 11% to Rs 2.4 per kWh in 2016-17.

"Tariffs are taking a hit mainly from the prevailing electricity demand-supply dynamics, lower coal costs and a decline in renewable tariffs," it said.

According to the credit rating agency, discoms are hesitating to tie-up new long-term power purchase agreements (PPAs) for both thermal and wind capacity as they await more clarity on the auction route for wind power, supported by the availability of cheaper spot electricity.

From the perspective of discoms in Delhi, for instance, the primary reason behind the national capital getting expensive power is that they are bound by long-term PPAs that run for 25-35 years, which were signed with generators well before privatisation in 2002. 

From the perspective of the generators, with electricity demand growth in India not keeping pace with the excess capacity addition and with tariffs falling, producers are facing offtake issues on power that they have not already tied up for sale through long-term PPAs.

JSW Energy Chief Executive Prashant Jain told a news channel recently that while the company had tied up for the offtake of about 65% of its power generation through long-term PPAs, it is facing challenges about disposal of its remaining "untied capacity".

Print Rate this article:
No rating

Number of views (251)/Comments (0)

rajyashree guha

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free