India has been a power deficit country for over 2 decades
and analysts are expecting a capacity addition of 50 GW against the
planned 78GW in the Eleventh Plan.
Due to the power deficit, short-term and merchant power rates have
been very high.
we can take a look at what’s happening in the power sector
in India:
Deficient Power
Median base load deficit of 8% and median peak load deficit of 13%
Country's power consumption to GDP growth at 0.94 x
With GDP growth likely to moderate, power demand to follow suit
Demand Slowdown?
Lower power generation and trading volume because of supply
constraints and not due to demand slowdown
Slowdown in generation owing to lower gas and water availability
Power trading volumes down as states temporarily barred distribution
utilities from trading power
Trading companies were barred to provide for lesser power cuts in the
pre-elections phase
Funding issues
Equity funding for private projects is difficult
Financing for new projects to be constrained by RBI’s exposure limits
for banks toward the power sector
Planning Commission is requesting RBI to relax exposure limits for
banks toward the power sector
Borrowing costs are likely to fall below 11% very soon
Execution Concerns
Execution rates for new power plants to improve in FY10
Generation projects have faced execution delays due to capacity
constraints at equipment suppliers mainly BHEL
Shortage of good erection and commissioning agencies and land
acquisition are still issues
What the new govt means
Implementation of CERC’s favourable tariff policy
Government’s near term focus will be on bulk ordering by NTPC
Some power cos could look at disinvestment
Power projects coming up will be greater need for transmission
capacity
as of now top most power companies are
NTPC
SUZLION POWER
RELIANCE POWER
J.P. POWER
NEYVALI LIGNITE
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