POWER

Ther Mal

India's low coal stocks threaten electricity supply: Kemp

India's power generators have struggled to rebuild coal stocks so far this winter because consumption is rising faster than the rail network can deliver more fuel from the mines. Fuel stocks are only slightly higher than this time last year. Stocks at power producers are equivalent to less than 12 days of consumption, up from 9 days this time last year but much leaner than 18 days in 2021 and 19 days in 2020.

Inventories normally accumulate from October to March, when air-conditioning and refrigeration demand is lower, and deplete from April to September, when cooling demand is high and mine output is disrupted by monsoon rains. But stocks have increased by only 2.3 days since September 2022, leaving generators poorly positioned to meet higher demand when temperatures climb from March and April onwards.

Mine output was up by around 18 million tonnes or 9% over the October-december period. But the coal actually despatched to power producers by the railways increased by just 1 million tonnes or less than 1%. The number of trains despatched in October was particularly low and the system proved unable to recover lost deliveries in November and December. As a result, the amount of coal consumed by power generators has exceeded the amount arriving from domestic mines by between 100,000 and 300,000 tonnes per day.

India asks utilities to import 6% of their coal for nine months

India's power ministry has asked utilities to import 6% of their coal requirement until September, according to a letter seen by Reuters, warning that domestic supplies could be curtailed if import targets are not met.Coal accounts for more than 70% of India's power generation, with coal-fired plants accounting for more than three quarters of India's use of the polluting fuel.

India expects domestic coal supply of 392 million tonnes during the six months to the end of September and expects coal availability to fall short of Demand by 24 million tonnes, according to the letter sent to heads of energy.

Departments of states and managing directors of all utilities. "Energy demand has increased sharply and it is expected to remain at increased level during first half of 2023/24,"a power ministry official said in the letter.India's coal-fired power output has increased much faster than any other country in the Asia Pacific since Russia's invasion of Ukraine, derailing efforts to cut emissions.

Power deficit rises slightly to 0.6 pc in Apr-Nov; demand surges around 11 pc

Power deficit in the country rose slightly to 0.6 per cent in April-November this fiscal year, while electricity demand has witnessed around 11 per cent jump in the said period, indicating buoyancy in the economy. The latest government data available showed that the power deficit in the country stood at 5,691 million units (MU) in April to November 2022, while it was 4,058 MU in the same period a year ago.

Experts are of the view that power deficit happens mainly because of technical reasons. They opined that India is a power surplus state but sometimes discomsdont have funds to afford round-the-clock supply of electricity.

The power producers supplied 10, 12,249 MU in April-November 2022, against the demand of 10, 17,940 MU, which resulted in a power deficit of 0.6 per cent. Similarly power producers had supplied 916,529 MU in April-November 2021, against the demand of 920,587 MU, which had resulted in a power deficit of 0.4 per cent. The data showed that the electricity requirement or demand has increased by around 11 per cent in April-November 2022, compared to the same period in 2021.Power consumption has also increased by over 10 per cent to 10, 12,249 MU in April-November 2022, from 916,529 MU a year ago.

Indian Energy Exchange Q3 Net Profit Dips Over 4% ToRs 77 Crore

Indian Energy Exchange (IEX) has reported an over 4 per cent decline in its consolidated net profit to Rs 77.21 crore in the December quarter. The consolidated net profit of the company stood at Rs 80.73 crore in the year-ago period, according to a regulatory filing.

Total income also fell to Rs 117.34 crore in the October-December quarter from Rs 130.77 crore in the corresponding period a year ago. An IEX statement said that in the third quarter of 2022-23, it achieved electricity trade volumes of 23 BU (billion units) which is a growth of 9 per cent quarter-on-quarter.

However, the electricity trade volumes declined 2 per cent in the December quarter on year on year basis. The electricity trade volume was 21.2 BU in July-September 2022 and 23.5 BU in October-December 2021. The trade volumes were impacted largely due to supply-side constraints, led by high prices of e-auction coal.

Continuing high spot e-auction coal prices led to the average clearing price in the Day-ahead market at Rs 4.56 in Q3 FY2023, while lower from Rs 5.40 in the previous quarter, but still high to provide optimization potential for Discoms and Open Access consumers.

Power Exchange prices peak in Jan 2023 due to significant gap in demand-supply volume: CRISIL

Peak power demand touched a record high of 6 per cent on-year, as several regions in the North reeled under a severe heatwave. The demand peaked again by 12 per cent on-year again in December 2022 due to increased heating requirement and continued momentum in manufacturing activities.

According to CRISIL, the demand is expected to grow a healthy 6-7 per cent on-year in the fourth quarter. Generation in the third quarter of fiscal 2023 was affected by seasonally lower output from renewable sources, leaving costly thermal power to service incremental demand. Due to a shortage of supply from hydro and wind sources by 50 per cent, power distribution companies had to increasingly depend on the short-term power market to fulfill the demand.

Elevated coal prices in spot e-auctions, along with winter heating demand, increased onmonth price 17 per cent during December 2022. The continuing rise in power demand in January on account of high heating demand and robust industrial activity further pushed up prices to Rs 6.79/ kWh as of second week of January. Pressure on prices was exacerbated by an all-India energy shortage, which rose a a whopping 429 per cent in the first ten days of January over December 2022.

Budget to double discom reform outlay to 15,000 crore

The Centre is likely to double the allocation for the revamped distribution sector scheme (RDSS) to around 15,000 crore in the union budget for 2023-24 from 7,565.59 crore in the current fiscal year, as it seeks to streamline and modernize the power distribution sector, two officials aware of the matter said.

The increase in budgetary allocation is aimed at reducing aggregate technical and commercial (AT&C) losses, and the gap between average cost of supply per unit of power and the average revenue realized per unit by increasing the efficiency of the distribution sector.

In FY22, AT&C losses of power discoms was at 17%. The government aims to bring it down to 12-15% by 2024-25. AT&C losses have come down to 17% in 2021-22 from 21% in FY21, and the gap between the average cost of supply and the average realizable revenue fell from 0.69 per kilowatthour (kWh) in FY21 to 0.22 a kWh in FY22. Under RDSS, the Centre aims to bring it down to zero by FY25.

The five-year scheme has an outlay of 3.03 trillion, from FY22 to 2025-26, including an estimated government budgetary support of 97,631 crore. State-run power sector lenders, Power Finance Corp. Ltd, and its subsidiary Rural Electrification Corp, are nodal agencies for implementing the scheme.

CERC to compensate imported coal-based power producers for higher running cost

Power regulator Central Electricity Regulatory Commission (CERC) has decided to fully compensate the power producers running imported coal-based plants for higher running costs required for supplying electricity under forced circumstances. The CERC order will come as a relief for imported coal-based power plants which ran to full capacity under the directions of the Ministry of Power for meeting demand.

The CERC in an order on January 3, 2023, said, "In order to ensure that the Petitioner maintains and operate its plant to generate power for supply to the Procurers in compliance with the directions of the MoP (Ministry of Power) under Section 11(1) of the Act, the Commission under Section 11(2) of the Act is required to compensate the Petitioner to cover the cost plus a reasonable margin of profit." The order was passed by the CERC on a petition filed by Tata Power Company Ltd.

The MoP in its letter on May 5, 2022 issued directions under Section 11 of the Electricity Act asking the imported coal-based power plants to operate and generate power to their full capacity.In cases where the power plants have PPA with multiple distribution companies, and if one distribution company does not schedule any quantity of power according to its PPA, that power will be offered to other beneficiaries and remaining quantity will be sold through Power Exchanges, the ministry had directed.

Delhi Electricity Regulatory Commission withdraws advisory on power subsidy through DBT

Delhi Electricity Regulatory Commission (DERC) has withdrawn its 2018 advisory to the Delhi government that power subsidy should be granted to the eligible beneficiaries through direct benefit transfer (DBT) mode, as done in the case of LPG cylinders.

The advisory was withdrawn on December 24, just a day after deputy chief minister Manish Sisodia wrote to DERC saying he had received a file from the power department suggesting that the government should shift to the DBT mode on power tariff subsidy and wanted the commission to re-examine the issue.

Sisodia, who also holds the charge of power department, had also received a note from the chief secretary under Rule 57 of the Transaction of Business Rules, 1993, which mandates the senior-most officer of the government to bring it to the notice of the minister-in-charge, the chief minister and the lieutenant governor if there is any material departure from the rules.

Interestingly, DERC re-examined the issue and withdrew its earlier advisory of switching to the DBT mode of February 2018 just a fortnight before the term of the former chairman of the commission was ending.

Govt may fund unrealised input cost of gas-based central power PSUs

The power ministry may provide financial support to state-owned gas-based generation com- panies to make up for unrealised input costs so that they can produce and sell electricity in the peak demand season for grid stability.

Much of India's gas-based power generation capacity, which stands at 24,800 MW, is idle because high gas prices have made electricity generated at gas plants generally more expensive than coal, hydro and renewable-based power, making it hard for these plants to find buyers. Now, the government plans to fund unrealised costs when they sell electricity, likely using the Power System Development Fund (PSDF). The fund from PSDF can be used as a sort of support to gas-based power that may be used to maintain grid stability during peak demand.

To meet the upcoming peak demand, which is likely to cross 230 GW in April, the government is planning to use increased gas-based electricity apart from ensuring sufficient coal stocks. The critical part of a day in the peak season is the non-solar hours when the maximum pressure is on coal and gas-based generations.