At 70%, thermal capacity utilisation highest in a decade in April-June

Coal-fired power stations have achieved 70% capacity on average in the April-June quarter, the best operational quarter in a decade.
Higher capacity utilisation reduces costs for both power producers as well as distribution companies.

In April, thermal projects operated at an average 72.45% load, while in May the utilization was 70%, according to provisional data available with the Central Electricity Authority (CEA).

Indian coal-based power generating stations operated at an average 77% load in FY12 and 74% in FY13 when the country had a peak hour shortage of nearly 12,000 MW.

In July 2012, India faced the worst blackout as high demand caused grid stress and forced plants to operate at high capacity.

Thereafter, the utilisation rates, known as 'plant load factor' or PLF, declined to 68% in FY14 due to higher availability of power as new projects were commissioned.

The PLF in the first quarter of FY20 (pre-Covid-19) fell to 63% owing to higher generation capacity and lower electricity demand due to the economic slowdown.

The utilisation rate in the first quarters of Covid-affected FY21 and FY22 was 47% and 59%, respectively.

"Irrespective of the PLF, the power generation units get fixed charges from the distribution companies in contracts. If PLF is low, the fixed charge increases as it is spread over a fewer number of units," an industry official said. "If PLF increases, then discoms gain as they are not paying for deemed generation. As power gets consumed, discoms generate more revenue."

Another official said operating at 70% PLF ensures debt payment for generation companies if they are not in cost-plus contracts.

The average PLF of central sector PSUs like NTPC and Neyveli Lignite rose to 80%, while state-run and private sector generation companies operated at 68% and 62%, respectively, in the quarter, the highest in a decade.

Electricity generation during the quarter grew 16%, while coal-based generation registered a 17% increase over the corresponding period a year ago.