The All-India thermal plant load factor (PLF) fell to 51% in August 2019 (August 2018: 55.5%), due to decrease in central, state and private sector PLF by 700bp, 70bp and 80bp, respectively.

All-India energy demand and supply decreased 1.6% yoy and 1.3% yoy in August 2019, respectively, resulting in a decline in energy deficit to 0.2% (August 2018: 0.6%). The steep decrease in central sector PLF was majorly due to decrease in PLF of NTPC Limited (‘IND AAA’/Stable) on account of coal shortage at its Talcher plant.

The coal inventory at thermal power stations rose 46.8% yoy to 21.6 mt in August 2019, however, declined 11.1% mom due to lower coal production, according to India Ratings.

Coal India Limited’s (CIL) production fell 10.3% yoy in August 2019, owing to lower production at its subsidiaries Western Coalfields Limited (WCL; down 26.4% yoy), Mahanadi Coalfields Limited (MCL; down 26.8% yoy) and South Eastern Coalfields Limited (SECL; down 17.7% yoy). MCL’s production, which contributes over 20% to CIL production, declined on account of protest at its Talcher mine in Odisha.

SECL’s production declined due to a mine accident and WCL’s production fell due to higher-than-expected rainfall in August 2019. While the number of thermal power plants with critical level of coal decreased to four in August 2019 from 11 in August 2018, the coal availability at pithead and non-pithead plants on August 31, 2019 remained low at 9 and 14 days, respectively.

The thermal generation was supported by increased reliance on imported coal with 28.7 mt coal imported during April-August 2019 (April-August 2018: 22.5 mt). In August 2019, short-term power price at Indian Energy Exchange (IEX) decreased marginally to Rs 3.32/KWh as against Rs 3.38/Kwh in July on account of decrease in demand on the exchanges. The difference in buy and sell bid volumes in August 2019 in day ahead market increased to negative 2,863 million units (MUs) (July 2019: negative 2,545MUs).

The electricity generation improved 0.6% yoy, despite a 3.5% yoy fall in thermal generation on account of higher generation from hydro (6.5% yoy) and nuclear segments (55.3% yoy). And the thermal sector witnessed a decrease in generation to 80.5BUs (August 2018: 83.4BUs) on account of lower demand, coal shortages and closure of few plants for maintenance.