Capacity Utilization of Coal-fired Power Plants Touches 60%

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Capacity utilization of coal-fired power plants has increased to 60.5 percent in December from a low of 52 percent in August, an important growth after years of decline.

Plants possessed by states saw capacity utilization jump almost 18.5 percent during the similar period against a small 5.7 percent progress in the corresponding previous period, data from the Central Electricity Authority showed.
Analysts say power plants may find it problematic to repay debts if volume utilization falls below 60 percent.

Thermal capacity utilization had dropped earlier in the year as noble monsoon rainfall reduced agricultural demand and amplified hydroelectric supply.

“Hydel power is way cheaper than thermal power and delivery companies prefer hydel power since it cuts their costs,”Rajesh K Mediratta, director-business development of Indian Energy Exchange added.

Spot prices had tumbled to about Rs 2 per unit, he said. Santosh Kamath, partner at KPMG in India, said advanced hydel generation hits power plants of states because they charge higher prices than central sector supply.

“This monsoon, distribution companies bought more hydel power and drastically reduced state sector power intake. As monsoons ended, they reinstated their purchase from the state sector top of the 18.5 percent growth,” he claimed.

“Nevertheless, a 60.5 percent capacity application for coal-fired plants may be comfortable in developing countries, but it may not be so in India specially with plants that do not have long term supply contract with consumers,” he told.