January 17, 2017

Slack in power output may weigh on power cos in Oct-Dec

My latest article; on power sector generation:
[C] ANALYSIS: Weak plant load factor may weigh on power cos Oct-Dec
Cogencis, Tuesday, Jan 17

    By Rajesh Gajra
    NEW DELHI - Most listed companies in the power sector may see subdued earnings from their core power generation operations in Oct-Dec, data on average plant load factor for the quarter and power generation of major companies during Oct-Nov showed.
    The average plant load factor fell to 59.8% in Oct-Dec for thermal power units from 63.8% a year ago, despite a rise in total generation. In Jul-Sep and Apr-Jun, the plant load factor was 56.7% and 63.7%, respectively. Thermal powermade up for 88% of all electricity generated in the country in Oct-Dec.
    In Oct-Dec, total power generation in the country rose 5.2% on year to 288,401 GWH, an analysis of Central Electricity Authority's data from Cogencis Corporate Fundamental Database showed. This rise could be due to new capacity as shown by contradicting lower plant load factor during the same period.
    In two of the preceding three quarters--Jan-Mar and Apr-Jun--the on-year power generation growth was sharp at 9% each.
    According to a report by Emkay Global electricity generation at five out of seven biggest power companies fell during Oct-Nov (see table). Even at NTPC, India's biggest power producer, it was the gas-based plants that saved the day for the state-owned company, with mainstay thermal plants seeing a decline in generation.
    The brokerage firm had not compiled the December figures at the time of filing this story. 
ELECTRICITY OUTPUT                     
                       Oct-Nov                            Apr-Nov
                   Output   On-year chng   Output   On-year chng
                    GWH       Per cent           GWH       Per cent
NTPC               40949         1.2            168183       5.6
NHPC                2626       -13.8             18852      -3.0
Tata Power Co        7302        -1.8             27986       0.4
Reliance Power      7196         0.1             27186      -4.3
Adani Power         9858        -5.4             37600      -7.7
JSW Energy          3645       -20.6             17519     -12.2
CESC                1790        -2.3              8339       9.9
Source: Emkay Global's power sector research updates  
    The brokerage firm said back down by state distribution companies affected generation at power companies such as Tata Power Co Ltd, JSW Energy and Adani Power.
    Electricity generation at the only hydro power generating company NHPC too saw a 14% fall in electricity generation in Oct-Nov and this could be due to the early onset of winter season, according to analysts.
    Collectively, the seven major power companies recorded a power output of 73,366 GWH in Oct-Nov, 2.1% lower than the year ago level. In the Apr-Nov period, their collective output had risen by a marginal 0.8% on year.
    The power sector continued to face constraints in terms of poor demand
recovery and low pricing and financials of power distribution companies, Emkay Global said in a report.
    "Falling merchant rates negatively impacted PLFs (plant load factors) of merchant players and plants with open capacities," Edelweiss said in a research note.  End


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