Business News | Thermal Power Plants' Performance Set to Improve Meaningfully: Ind-Ra

Mumbai (Maharashtra) [India], June 15 (ANI): India Ratings and Research (Ind-Ra) has said the operating performance of thermal power plants can improve meaningfully, given the change in incremental demand supply equation after a decade.

The incremental demand is likely to outstrip incremental capacity addition. This lowering of supply is driven by limited capacity addition of thermal power plants, phasing out of old capacities largely from the state sector and slowdown in renewable capacity addition.

The demand side is likely to remain robust due to pickup in industrial activity, early signs of capex revivals -- given strong balance sheet position of corporate India -- and pick-up in exports.

"This is likely to translate into higher plant load factors (PLFs) beginning FY22 which have continued to fall since FY11," said Ind-Ra.

It expects a pick-up in PLF of plants which are placed lower in the merit order followed by others. 4QFY21 was a precursor of the way operating performance of plants can rise.

The biggest beneficiaries of upward swing in generation will be players with open merchant capacity and good merit order positioning followed by regulated plants.

"Though regulated plants tend to get their fixed cost recovery basis plant availability, a higher PLF will result in better operating parameters leading to energy savings, and a higher plant availability factor will result in capacity incentives," said Ind-Ra. (ANI)

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