Rating agency Crisil on Wednesday said the immediate power crisis may have been averted, but nearly a tenth of India’s coal-fired thermal power plants are in danger of closure and closure due to erratic coal supplies and high prices of imported coal.
Domestic coal supplies have been uncertain as mining operations have been disrupted by rains, while non-coking coal imports have declined by more than 20%. As a result, coal stocks at power plants have been reduced to an average of five days’ supply.
CRISIL Ratings Director Ankit Hakhoo expects global coal prices and domestic e-auction premium to remain elevated over the next few months, with private power generation capacity at around 20 GW being the ‘highest’ of the total 209 GW of coal-fired capacity. To be embroiled in a blow or accident’.
“Most of these plants do not have fuel supply agreements and are heavily dependent on open market or coal imports with committed tariffs for electricity sold to utilities. Hence, if these gencos continue to operate at these higher current coal prices, it may lead to operating losses and thus these capacities may prefer to remain closed till the coal prices cool down,” Mr. Hakhoo said.
Electricity demand grew by about 9% in the July-September quarter compared to the same period in pre-pandemic 2019-20, but dependence on thermal energy sources grew disproportionately as hydro and nuclear power generation was lower this year.
CRISIL associate director Rohan Kulshrestha said even units with fuel supply agreements could have coal supplies “sufficient for their current generation”.
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