Northern region drives power demand in August
Conventional generation growth moderates to 4.6% in September
* Conventional electricity generation increased 4.6% YoY in September 2017, slowing from 7.9% growth in August. Hydro and nuclear generation remained weak, but the growth run-rate was better MoM. Coal generation grew faster at 6.6% YoY (17% in August).
* State-owned plants are driving growth, as generation grew 12% YoY (+20% in August). Generation was flat YoY at center-owned plants, but up ~3% YoY at private-owned plants.
* Including renewable energy (reported with one-month lag), generation grew 8.4% YoY in August 2017 and 6.2% YoY in 5MFY18. RE had ~31% share of incremental generation and represented 8.9% of India’s generation in 5MFY18.
Capacity addition partly offset by retirement and conversion to CPP
* Only 30MW capacity was commissioned in August 2017. Commissioning stood at ~3.9GW in 5MFY18, as against ~2GW in the year-ago period.
* However, 2.6GW of capacity was either retired (1.3GW) or converted to CPP (1.3GW), resulting in net utility-based capacity addition of ~1.3GW in 5MFY18.
* Conventional capacity PLF was flat YoY at 52% in September 2017 and up ~60bp YoY to 51% for 6MFY18. Coal-based PLF was up by 177bp YoY to 57.5% in September 2017 and by 135bp YoY to 56.8% for 6MFY18.
Northern region drives demand in August; peak supply increase outpaces energy supply growth
* Based on electricity supply analysis by states, peak supply rose 8% YoY to ~161GW in August, outpacing energy supply growth of ~5%.
* Supply was strong in the northern region (up ~15% YoY). Energy/peak demand in August 2017 grew by 22%/21% in UP, 26%/32% in Rajasthan, 0%/17% in Gujarat and 7%/14% in Telangana.
Exchange prices rising on coal supply issues…
* IEX day-ahead prices increased ~31% MoM to INR4.09/kWh in September 2017. Prices during the peak hours of 19-24 averaged ~INR5.7/kWh. Volumes grew 13% YoY to 4.1BU.
* Sudden spike in demand for coal-based generation due to the weakness in hydro/nuclear and low coal stocks in the system has driven demand for merchant power and prices.
…benefiting high-cost plants
* Merchant power plants based on imported coal and high-cost PPAs are the key beneficiaries. JSW Energy Ratnagiri’s and SembCorp’s plants have seen a jump in PLF . CESC Dhariwal’s PLF was up 400bp MoM to 44%. Rattan India Amravati’s PLF improved sharply from 26% in August to 56% in September on improved merit order position.
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