CRISIL says Plant Load Factor of coal based power plants will be highest in five years in FY 23

22 Aug 2022 , 03:43 PM

According to a CRISIL Rating estimate, the plant load factor (PLF) of Indian coal-based power plants will increase by over 300 basis points (bps) to 62% this fiscal, which will be the highest in the previous five fiscals. This improvement will be fuelled by strong demand growth and limited capacity addition in the sector.

The operating profit of private generating firms (gencos) with a capacity of one-third (25 GW) will likely reach a five-year high as a result of this, according to the report.

As the effects of the pandemic subsided, annual electricity demand rebounded significantly in the most recent fiscal year, increasing 8.2% year over year and keeping pace with the GDP's 8.7% rise. Given the strong association between GDP growth and power demand growth this fiscal, which is forecast to see GDP growth of 7.3%, power demand is likely to increase by more than 6% year over year.

However, capacity expansion is still modest when compared to demand expansion. In the previous five years, coal gencos only added 2% of capacity per year compared to annualized demand growth of 3.4%, and they may add 3.5% (or 7 GW) this fiscal year compared to demand growth of nearly 6%, it claimed.