Fitch Ratings: After post-pandemic spike of 11.3% in first half, forecast for second half is 8%
GN Bureau | December 20, 2022
Growth in India’s power demand is likely to decelerate in the second half of the financial year ending March 2023 (2HFY23), after robust 11.3% y-o-y growth in 1HFY23, Fitch Ratings says.
Power demand in 1HFY23 benefited from a post-pandemic rebound in demand and a low base during 1HFY22. Fitch expects India’s power demand to grow by around 8% in FY23 (FY22: 8.2%), it said in a release Tuesday.
Fitch expects thermal power plants' average plant load factor to remain above 60% in FY23 (1HFY23: 64.5%), benefiting from continuing power demand growth. Fitch expects improved domestic coal supply will support coal inventory at power plants and should moderate coal import growth from current high levels, although imports are expected to remain robust.
Fitch estimates generation companies' (gencos’) receivable position to improve as distribution companies have started clearing their dues to gencos following imposition of the late payment surcharge rule by the central government.
Renewable capacity addition is likely to soften in 2HFY23 (8.2MW: 1HFY23, 15.5MW: FY22) and there may be deferment in capacity additions due to high commodity prices, supply chain issues and higher import duties on solar modules and cells from April 2022.
Capacity Addition to Slow Down
Fitch expects renewable capacity addition to soften in 2HFY23 (8.2MW: 1HFY23) with some capacity deferred due to current high commodity prices, higher import duties and supply chain issues. Solar continued to lead the capacity additions with 6.8MW in 1HFY23. This could partly be due to advance procurement of solar equipment by a few developers ahead of imposition of the basic custom duty (BCD) of 40% and 25% on solar modules and cells, respectively, from April 2022, replacing the safeguard duty of 15%.The government does not intend to provide exemptions to the BCD.
Support to Increase Renewable Capacity
The central government aims to generate 50% of India's electricity from renewable sources (including hydro power) by 2030 (7MFY23: 29%, FY22: 24%). The government plans to achieve its target through Green Open Access (OA), the success of which depends on timely and effective implementation of rules by state power regulators.
Read the full Fitch Ratings reports here: https://www.fitchratings.com/research/corporate-finance/india-power-watch-1hfy23-20-12-2022
Snakes, Drugs and Rock ’N’ Roll: My Early Years By Romulus Whitaker with Janaki Lenin HarperCollins, 400 pages, Rs 699
The Moral Contagion By Julia Hauser and Sarnath Banerjee HarperCollins, 140 pages, Rs 699 The world has lar
Addressing the Viksit Bharat Viksit Uttar Pradesh program in Lucknow on Monday, prime minister Narendra Modi launched 14,000 projects across the state, worth more than Rs 10 lakh crore at the fourth groundbreaking ceremony of UP Global Investors Summit held in February 2023. The projects relate to sectors
During the four days from Feb 16, more than a thousand birdwatchers throughout India are coming together with the goal of documenting as many birds as possible across the country’s diverse locations. Over one lakh birdwatchers globally participate in the annual Great Backyard Bird Coun
The Central Consumer Protection Authority has sought public comments on the ‘Draft Guidelines for Prevention of Misleading Advertisement in Coaching Sector’. The draft guidelines are placed on the website of the Department of Consumer Affairs and are accessible through the link:
In a landmark judgment, the Supreme Court of India has held the anonymous, unregulated and unlimited funding through electoral bonds and companies as unconstitutional. The five-judge Constitution Bench of the Supreme Court comprising chief justice DY Chandrachud and justices Sanjiv Khanna, B