A slowdown in power demand by state utilities and fuel shortages have begun to hurt the country's largest power producer, NTPC, with the firm claiming to have foregone revenues to the tune of Rs 6,600 crore in the April-November period of the current fiscal on account of reduced generation.
The company reported a loss of generation of 22 billion units (BU) up to November-end in the current financial year, a 69% jump over a slippage of 13 BU in the corresponding period last fiscal. In fact, the loss of generation stood much higher in April-October at 32.5 BU, but more than 100% capacity use in November has reduced the loss.
A slippage (loss of generation) is the difference between the optimum level of capacity utilisation and actual generation.
Despite high levels of generation loss, NTPC's financials are protected to an extent as the company has paid the fixed charges for optimum capacity, irrespective of whether the discoms buy power (the CERC draft guidelines unveiled on Monday, if implemented, could deprive the company of this facility).
In April-November, out of 22 BU of generation loss, 14 BU is due to slow demand from discoms but the remaining 8 BU is due to lack of fuel for which the company would not even be paid capacity charges as it also affects availability factor of plants.
According to a Kotak report, NTPC's generation loss has touched 26% net commercial generation in the April-October this fiscal, a sharp rise over a loss of 11% in FY12 and 14% in FY13. The generation loss has resulted in a fall in PLFs to 77% in H1FY14. However, return profile of projects has depended more on plant availability factor (PAF), which has seen an improvement—86% in H1FY14 against 84% in H1FY13.
With NTPC realising average tariff of Rs 3.09 a unit of electricity, the generation loss in April-November amounts to “revenue foregone” of Rs 6,600 crore, without considering other variable factors, a company official said.
“Up to now, our generation loss has been huge as state electricity boards are not buying power,” NTPC chairman and MD Arup Roy Choudhury said.
In an energy starved country, where peak shortage is over 10%, generation loss due to the states' refusal to buy power or fuel shortages is paradox.
Faced with financial problems, state utilities often do not buy power and resort to load-shedding rather than ensuring regular supply of