Sector Update | Utilities
Power monthly
April 2017: Generation up 3.8% YoY
Seasonal uptick in IEX prices
Conventional generation
Conv. generation - BU
daily avg. yoy - %
Conventional generation up 3.8% YoY in April
Conventional electricity generation grew 3.8% YoY in April 2017, encouraging as
it comes off a strong base of 14.7% YoY growth in April 2016.
Coal-based generation grew at a slower pace of 2.4% YoY, as hydro generation
grew 30.9% YoY. Hydro is typically cheaper and gets preference in merit order.
Private coal-based plants gained share, as generation grew 5.1% YoY.
Generation at central coal-based plants grew 2.1% YoY while for states declined
0.4% YoY. NTPC’s standalone coal-based plants generation grew 2.3% YoY.
RE generation grew 13.1% YoY in March 2017 (latest data). Solar led with a
growth of 72.8% YoY.
For FY17, RE generation grew 25% YoY, representing 6.7% share of all-India
generation (up 102bps YoY). Solar grew 82.5% YoY while wind grew 39.3% YoY.
Including RE all-India generation grew 5.8% YoY in FY17.
There was 12.9GW of conventional generation capacity added in FY17, sharply
lower than ~23GW added in FY16. Capacity addition was the lowest in five-
years, and has peaked-out in our view.
All-India conventional capacity PLF increased by 33bps YoY to 53%. Coal-based
plants PLF declined by 46bps YoY to 62%.
RE capacity stood at 57GW by end of FY17, up 14GW YoY.
Regionally, northern region drove electricity consumption in March 2017.
Punjab (16.6% YoY), UP (16.5% YoY) and Haryana (10.5% YoY) were high growing
states. Consumption was also strong in Telangana (22.7% YoY) and Karnataka
(9.2% YoY)
For FY17, UP (13.5% YoY) and Karnataka (9.7% YoY) saw the highest growth in
consumption.
IEX all-India prices increased 8.1% MoM to INR2.77/kWh in April 2017, a
seasonal pattern. Prices are however down 4.7% YoY on supply. Prices in
southern region remain at premium to rest of India due to grid constraints.
IEX volumes grew 7% YoY in April. Southern region volumes were up 65% YoY.
Strong growth in RE generation, led by solar
Capacity addition at five-year low
Northern region drives demand in March 2017
IEX prices
IEX avg. price - INR/kWh
change yoy - %
IEX: seasonal uptick in prices; South driving volumes
Private plants: Dhariwal and Vijaynagar PLFs improve in April 2017
CESC:
Dhariwal’s PLF was at ~47% as the PPA capacity of 300MW operates at full
capacity (remaining 300MW was unutilized).
JSW Energy:
Vijaynagar’s PLF improved to 81% from v/s. 60% avg. for FY17 on
short-term contract with Karnataka.
Rattan India:
Amravati operated at 52% PLF due to shutdown at some of state-
owned plants and improved demand.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
8 August 2016
1
Sanjay Jain
(SanjayJain@motilaloswal.com@MotilalOswal.com); +91 22 3982 5412
Dhruv Muchhal
(Dhruv.Muchhal@motilaloswal.com@MotilalOswal.com); +91 22 3027 8033