Power Sector Trips On Weak Economy, Dues From State-Owned Discoms

A weak economy, delayed payments by State-owned power distribution companies, lending bottlenecks and climate change-induced natural calamities are rattling stakeholders across the board in the power sector.

- Venkatesh Ganesh

A recent report by SBI has highlighted that electricity demand in India contracted to an eight-year low in September impacting all the three stakeholders – power producer, distributor and the lender (in this case banks).

JSW Energy, a part of the $14-billion Sajjan Jindalbacked JSW Group, in Q2 of this financial year, said that India’s power demand growth had declined to 1.6 percent from 6.8 percent, when compared on a yearly basis. Prashant Jain, Joint MD and CEO, JSW Energy, attributed this to heavy rains and floods in west and south India.

The Plant Load Factor (PLF) in the thermal segment had edged down to 52.5 percent in Q2 FY20, as against 57.6 percent in the corresponding quarter of the last fiscal. PLF is used to determine a plant’s power producing capacity.

Also, renewable and thermal generation declined by 9.2 percent and 2.5 percent, respectively. Hydro energy, however, grew by 9.1 percent on a Yo-Y basis.