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New User35% of India’s total thermal power capacity lying unused
19 Aug 2016
More than a third of India's 303 gigawatt thermal power capacity is lying unused
while the rest is running at a shade over 55% utilisation owing to inadequate demand.
Analysts said utilisation is expected to fall further if more capacity is added as planned by
the government, portending losses for power firms. About 35% of the total capacity, or 104
gigawatt, is lying idle at present. The government added about 24,000 mw of fresh
conventional capacity last year and plans to add 86 gigawatt by 2022. In addition, 100
gigawatt of solar capacity is to be added by 2022.
"Falling capacity utilisation translates into losses and inability of new power plants to service
interest costs, leading to nonperforming assets at banks," said a senior analyst, who did not
wish to be identified.
The list of shut units includes a chunk of 31gigawatt capacity that was set up after 2009.
These include 6,360 mw capacity that does have power supply contracts with distribution
companies but is lying shut due to nonavailability of coal. Another 5,650 mw have neither coal
nor power supply contracts with any distribution company. The next set of 9,316 mw have coal
supply contracts but does not have power supply agreements. Yet another set of 2,940 mw
have letter of coal supply assurance from Coal India and has managed to sign power purchase
agreements but has not been receiving coal from the staterun miner. The last set includes 3,300 mw of plants that do not have power
purchase agreements and despite Coal India's assurance of supplies, have not been receiving coal.
"While plants are shut due to unavailability of coal, Coal India is saddled with some 45 million tonnes of coal as of July 31. Its stock
position has reached a level where the company is being forced to scale down productions, yet power plants are not receiving coal
because the government is yet to change a policy that was framed when coal was in short supply," said Ashok Khurana, director general
of the Association of Power Producers.
If these new plants are allowed to receive coal they could have generated power and sold them at least at the power exchanges, Khurana
said. "These could have reduced power prices further but these power companies could at least recover their interest cost and service
their debt burden," he said. Nonetheless, of the rest, about 72 gigawatt, some are shut due to water shortage, some due to equipment
failure and yet another set has been shut because its operations have turned uneconomical due to age of equipment.
These include a set of plants with 11gigawatt capacity that are shut as part of planned maintenance which is likely to come on stream
within a fortnight
Source:ET