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New UserNearly half the country’s coal fired power capacity remains unutilised this monsoon season
16 Aug 2016
Nearly half the country's coal fired power capacity have remained unutilised this
monsoon season as hydel plants generated close to 22,000 mw of cheap power every day
in the last one month.
At this level of capacity utilisation, new thermal power plants can hardly recover their interest
cost needed to service bank debts, while older ones struggle to make profits. "If capacity
utilisation of plants fall further, power generators may be forced to back down a large
number of units and a lot more power stations may come up for sale under stressed asset
category," said a senior analyst who requested not to be named.
According to analysts, 70% of most thermal power projects' costs are financed through longterm
loans. As a result, interest cost components are one of the largest expenditures in any
power stations' books.
During the planning phase project developers assume that the plant can run at least at 75% capacity utilisation and provide for decent
returns. However, if utilisation dwindles to around 50% plants are in for trouble. Expenditures far outstrip income at this level.
Data released by the government shows thermal power plants totaling 87,000 megawatts in Western India ran at 49% of their full capacity
in July. Nationally, 46% of 211 gigawatt of coalfueled power plants' capacities remained unutilised during the month.
Between July this year and last, South India's total installed capacity increased nearly 21% to 42,000 megawatt, but capacity utilisation fell
11% during the same period to 65% last month.
With a decent monsoon leading to hydel plants generating and injecting close to 22,000 mw of cheap power every day demand for coal
fueled electricity has declined. Also, power demand has not been growing at the pace it was anticipated, leading to a mismatch between
demand growth and capacity addition.
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