The report states that the PLF of gas-based power plants is likely to decline further this fiscal
Gas-based power plants, already reeling under financial stress and availability of cheaper alternatives, face further risk as their plant load factor (PLF) is set to deteriorate from a lowly 23% at present.
Private sector-owned gas plants, which are also dealing with lack of long-term power purchase agreements (PPAs), are worst-hit as their PLF stood at 14.4% in last fiscal as against 70.5% in fiscal 2011, said a report by India Ratings and Research (Ind-Ra).
PLF is the ratio between the actual energy generated by the plant to the maximum possible energy that can be generated, with the plant working at its rated power, for a period of an entire year.
The report states that the PLF of gas-based power plants is likely to decline further this fiscal.
The expectation is based on the closure of the scheme for the revival of such plants by way of government subsidy through the power system development fund, states the report.
Among other reasons for the PLF falling are “higher variable cost of generation than that for coal-based power plants and other alternatives, availability of lower-cost power on the power exchanges and no improvement in the domestic gas production.”
In FY16, the government had announced a subsidy scheme to revive gas-based plants, which lead to an improvement in the PLF from 21% in FY15 to 23% in FY17.
According to Fitch Ratings, the PLF of gas-based power plants dropped in the range of 1.9% to 22% during the first half of FY17.
A Mumbai-based analyst told DNA Money that the country has 60 gigawatt of financially stressed power if gas and coal-based power plants are put together.
According to the Ind-Ra report, even if government once again rolls out a subsidy scheme for gas-based plants, distribution companies’ appetite to buy power at Rs 4.7 per unit would remain low, considering their weak financial health and access to cheaper alternatives.
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