Friday, Dec 09, 2022

Demand sputters, thermal plant load at 10-year low

Government estimates for the April-December, 2016, period show the average PLF of the thermal power stations in the country has slid to a decadal low of 59.64 per cent.

During the first three quarters of the current fiscal, the operating requirement of coal and lignite thermal power plants — the mainstay of India’s electricity grid — has dipped under the 60 per cent mark, a 10-year low.

Government estimates for the April-December, 2016, period show the average Plant Load Factor (PLF) of the thermal power stations in the country has slid to a decadal low of 59.64 per cent (it was 61.58 per cent during the corresponding period last fiscal). Reason: sluggish industrial load resulting in the projected demand for electricity trailing the pace of commissioning of new power projects, alongside a pick-up in the addition of renewable projects to the country’s energy mix.

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Reflecting the sharp slide in the GDP growth rate from the near double-digit growth ten years back to current levels of around 7 per cent — a result of industry operating at far lower than optimal capacity and the private sector’s continued reluctance to make fresh investments — the PLF of the thermal power stations in the country has been seeing a steady dip, down from 78.9 per cent in 2007-08 to 62.29 per cent about in 2015-16.

The consistent dip in the load factor — a broad measure of a power plant’s output during a period of time as compared to its maximum output — is a consequence of the capacity addition growing at 13.7 per cent annually in the three years to 2015 even as consumption grew at a measly 6 per cent. The slide is evident in the numbers, considering that the national average PLF of coal and lignite-based power generating stations has come down from 73.32 per cent in 2011-12, 69.93 per cent in 2012-13, 65.55 per cent in 2013-14 and 64.25 per cent in 2014-15, before slumping further to 62.29 per cent last fiscal.

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Interestingly, during the first quarter of the current financial year (April-June 2016-17), the PLF had actually improved to 63.4 per cent, before dipping in the subsequent two quarters to take the average for the three quarters to under 60 per cent, largely due to a good monsoon season.

According to a senior official at the Central Electricity Authority, the policy planning arm of the government in the power sector, one of the major reasons for the slide in PLF was the rapid increase in power plant commissioned capacity (86,565 MW from conventional sources and about 19,500 MW from renewable sources added between April 2012 to June 2016), even as demand has simply failed to keep pace.

Alongside this, programmes aimed at conservation of energy because of efficiency measures and the increasing share of renewables in the overall energy mix, two measures high on the agenda of the NDA government, are being cited as reasons for the dip in thermal PLF. Also, due to the low availability of fuel for gas-based thermal power stations, their PLF was a measly 22.6 per cent during this year.


As on December 31, 2016, thermal stations accounted for about 70 per cent of the country’s installed capacity (2,15,168 MW of thermal out of the total 3,10,005 MW). Of the rest, renewable capacities (including solar, wind and small hydro) cumulatively added up to 45,917 MW while hydroelectric stations were at 43,139 MW.

The subdued demand is reflected in the coal offtake numbers of state-owned Coal India Ltd. The offtake of coal reported by CIL in the April-December this fiscal was at 391.7 MT against the target of 433.9 MT, according to a January 2017 BSE filing by the company. CIL’s output in the April-December period stood at 377.7 million tonnes, lower than the target of 417.5 MT, even as the Coal Ministry has maintained that there were no plans to cut down coal output because the demand had already picked up.

The slowdown in broader economy, meanwhile, is reflected in fresh investment numbers. During the quarter ended December 2016, according to numbers compiled by the Centre for Monitoring Indian Economy, new investment proposals worth Rs 1.25 trillion were recorded, as compared to an average Rs 2.36 trillion worth of new investments seen per quarter in the preceding nine quarters of the NDA government.

First published on: 08-02-2017 at 03:25:02 am
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