1. After fine start to 2016, power generation growth turns sluggish

After fine start to 2016, power generation growth turns sluggish

Power generation growth continues to limp due to sluggish growth in demand, as power stations run at a historic low utilisation, or plant load factor (PLF).

By: | New Delhi | Published: November 5, 2016 6:23 AM
Power generation got off to good start at the beginning of the financial year when it clocked 15% growth in April. Power generation got off to good start at the beginning of the financial year when it clocked 15% growth in April.

Power generation growth continues to limp due to sluggish growth in demand, as power stations run at a historic low utilisation, or plant load factor (PLF). According to the Central Electricity Authority (CEA), power generation grew by 1.1% in October to 99.7 billion units (BUs) compared with the same period a year ago, mainly due to a decline in coal-based generation.

The muted growth in October was led by 25 bps y-o-y decline in coal-based generation as PLF declined to 60%, a decrease of 710 bps compared with the same period a year ago. However, generation growth in October was also impacted by the high base from last year, when it grew by 9%. Power generation got off to good start at the beginning of the financial year when it clocked 15% growth in April. However, it has seen a steady decline since, with the exception of two intervening months. In August, there was nil growth compared with last year but generation grew by 2.4% in the subsequent month. CEA has kept the generation growth target for FY 17 at 6.3% to 1,178 BUs, but the year-to-date growth in generation has been lower than the projected target, at 4.5%, and lower when compared with the year-ago period.

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