Power stocks have been buzzing off late as for thermal power plants, the open market electricity tariff in the country has reached a 5-year high. Also for gas-based stranded power pants, there was news of re-negotiation of tariffs in the Australian deal, Gorgon. Are all these positives enough to conclude a recovery in the power sector? In an interview to CNBC-TV18, RK Verma, Chairman of the Central Electricity Authority discussed about the same.
Power stocks have been buzzing off late as for thermal power plants, the open market electricity tariff in the country has reached a 5-year high. Also for gas-based stranded power pants, there was news of re-negotiation of tariffs in the Australian deal, Gorgon. Are all these positives enough to conclude a recovery in the power sector?
In an interview to CNBC-TV18, RK Verma, Chairman of the Central Electricity Authority discussed about the same.
The rates at the power exchange are not an indicator of the power supply situation because the trading that takes place at the power exchange is very small, just 3-4 percent of the total capacity, he said.
Reduction in hydro generation because of less inflows in rivers but we have enough capacity, we are meeting that requirement and as of now there is no shortage in the system, he added.
Demand has been increasing at the rate of 5.77 percent during the last year and the trend is continuing this year also. We expect the growth in demand to be around 6 percent, said Verma.
As of now CEA has met a peak demand of 160 megawatt (mw) and we expect that by year 2022, the peak demand will be 25,000 mw, he further mentioned.
Coal plant load factor (PLF) is close to 60 percent and Verma hopes it to sustain in the near future.
On setting up a separate market exchange for renewable power, he said that we are deliberating all these issues, it is a new kind of scenario that will emerge and we are discussing all those things because it is a new challenge that the renewable energy is going to throw.
Speaking on merchant power rates, Harshvardhan Dole of IIFL said that average volume being traded on power exchange has increased in last few weeks.
Source: moneycontrol
