Credit rating agency, ICRA in its latest report has said that the all-India electricity demand rose 7.4 percent in July 2018 on a year-on-year (Y-o-Y) basis as per the provisional estimates of the Central Electricity Authority (CEA). However, it said that thermal plant load factor (PLF) or capacity utilisation moderated to 55.5 percent in July 2018 from 60.7 percent in June 2018, on account of higher generation from wind and hydro sources, leading to backing down of thermal units.
The rating agency has stated apart from a few months in between, the monthly electricity demand growth has remained higher than 5 percent over the past 15 months, reflecting a sustained recovery in demand. It also expects that this demand growth trend is likely to continue, given the focus of the central government on improving rural household electrification. However, it noted that the thermal PLF remains sensitive to the generation from renewable energy sources and coal supply available from domestic sources.
According to the report, in the first four months of FY19, the thermal power segment did not witness any capacity addition, while the hydro and renewable energy segment added 110 MW and 1,742 MW, respectively during this period. Besides, it expects the capacity addition from the thermal segment to remain subdued and to be mainly driven by the central and state sector. With an improved tariff competitiveness and strong policy thrust, it said that the renewable energy segment would remain a major driver of capacity addition in the power sector in the medium term.