Prime Minister Manmohan Singh on Monday expressed concern over the slow rate of progress in power sector as compared to manufacturing and service sectors, which have logged double digit growth rates in the lest few year.
India Ratings & Research, part of global major Fitch Group, also cautioned that expected investments worth Rs 1,75,000 crore (Rs 1,750 billion) in various power projects could turn into non- performing assets unless fuel issues are resolved.
Fluctuating between hope of fuel supplies and despair of prolonged grid failures, it was mostly a gloomy year for the power sector in 2012, but it is looking forward to brighter days ahead under a new and young minister.
Coal India looks set to achieve its 2024-25 (FY25) production targets. If it can achieve its aim of ramping up Fuel Supply Agreement (FSA) and e-auction volumes, along with cost-saving, evacuation and infrastructure-improvement projects, the company could maintain its momentum as a critical infrastructure and core industry performer. Analysts estimate e-auction volumes of 108 million tonnes (MT) in FY25 and 120 MT for FY26, which is encouraging given the premium of e-auction prices which are consistently over 50 per cent higher than FSA.
In a face saver, SAARC countries signed a framework agreement on cooperation in power sector but failed to finalise the much-awaited motor vehicle and railway pacts
These issues range from resolving the conflicts between power sector borrowers and banks.
Signalling both change and continuity, India's new government, headed by Prime Minister Narendra Modi for a third consecutive term, got into work gear on Tuesday with cabinet ministers and ministers of state filing into their respective offices to assume charge.
He said land acquisition and coal block auctions, and water were challenges impeding the growth of the sector.
Now, expectations are high that the incoming government will act swiftly to put the sector back on the rails.
The power sector has been notorious for missing capacity addition targets and it remained just that in 2008.
Shinde said the average plant load factor of Indian generation units improved to 77.5 per cent during 2009-10 from 73.6 per cent in 2006.
The sanctions imposed by developed countries, coupled with lack of political will have deprived India of optimal growth in the nuclear power sector, according to senior nuclear scientists.
India's power sector faces annual losses of $27 billion by 2017 unless sweeping reforms are taken to tackle inefficient subsidies, theft and political meddling in utility companies, the World Bank said.
In 1991, during the balance of payments crisis, it was an even-money bet that India would become a basket case. In hindsight, it was a great entry-point for investments because the economy made a spectacular recovery. But nobody could have been sure about the turnaround.
The survey pointed out that the transmission and distribution losses in the power sector, at 35 per cent, were among the highest in the world.
US wants to include climate change deal in it; India disinclined
The country's narrowing power deficit and increased coal production may not be indicators of the end of stress in the industry. Amritha Pillay reports.
'The expeditious enactment of labour codes and strategic measures to bridge the skills jobs gap are critical.'
24x7 power supply to farmers emerges as a political lightning rod in the state.
Infrastructure firm Larsen and Toubro on Thursday said it would form a joint venture company with the South Africa-based Befula Investments to explore opportunities in the power sector in the African nation.
The month also saw Adani Power acquiring the 600-Mw Korba West thermal power plant from the Gautam Thapar-led Avantha group for Rs 4,200 crore (Rs 42 billion).
Around Rs 40,000 crore (Rs 400 billion) investment in the power sector is in limbo for want of government decision on allocation of natural gas to the proposed electricity stations.
Adani Power, part of the Adani group, plans to add close to 6 gigawatts (Gw) of new power assets in the next five years, according to an investor presentation by the company. That is clearly meant to ride on India's burgeoning power demand. But there is another side to it: All of this new capacity is expected to be thermal power, or power produced from coal.
The improving outlook for the power sector has caught the interest of dividend yield funds. In the first four months of the current financial year (2023-24, or FY24), five of the six largest dividend yield funds have shown a notable increase in their exposure to stocks within the power sector. Some have even introduced new stocks to their portfolios.
While near-term performance is difficult to predict after a huge run-up, fund managers believe the PSU theme's prospects remain sound over the medium to long term.
The country's fast growing power sector has the potential to create as many as six lakh jobs during the 12th Five-Year Plan period (2012-17), a top government official said.
Coal India Limited's (CIL) October-December quarter of financial year 2023-24 (Q3FY24) results have beaten the Street's estimates. Revenue rose 3 per cent year-on-year (Y-o-Y) to Rs 36,200 crore, led by higher volumes and better realisation from Fuel-Supply Agreement (FSA) coal. The blended average selling price (ASP) was down 6 per cent Y-o-Y to Rs 1,727 per tonne, and the FSA ASP was up 3 per cent Y-o-Y to Rs 1,532 per tonne.
Addressing a rally, Modi alleged that artificial shortage of coal is being created in the country.
According to an annual review of M&As in the global power sector by PricewaterhouseCoopers, the total deal value in the power and gas utilities sectors (excluding renewables) is up 19 per cent year-on-year from $98 billion in 2009 to $116 billion in 2010. The number of deals also went up to 670 in 2010 from 596.
India's industrial production growth slowed to 3.8 per cent in January, while the February retail inflation at 5.09 per cent remained within the Reserve Bank's comfort zone for the sixth straight month, according to the latest government data. Growth in factory output, based on the Index of Industrial Production (IIP), slowed to 3.8 per cent in January 2024, mainly due to poor performance of manufacturing, mining and power sectors, according to the data released by the Ministry of Statistics & Programme Implementation.
The United States has said there is erosion of confidence within the US business community about investment in the Indian power sector and it will be difficult to restore it unless structural issues are addressed.
"Hooking" is an endemic crime -- if you live in India, you've used "hooked" power.
The state's economic health is in focus as it has consistently breached the fiscal deficit in eight of the last 10 years since Telangana's formation.
Hard and unpopular decisions are needed - not just another round of financial repackaging to sort out the discom mess.
The pace of lending to the infrastructure sector, including power and roads, fell sharply to 1.8 per cent year-on-year (YoY) in May, 2023 compared to 9.8 per cent in May, 2022. Within the segment, the growth in loans to the power sector was at 0.3 per cent YoY in May 2023, down from 9.3 per cent in May 2022. The RBI data showed that outstanding credit to power sector stood at Rs 6.17 trillion in May.
Key infrastructure sectors -- from railways to power, and from coal to petroleum -- will not only be part of the achievements but promises too, as the BJP fights to get a third term at the Centre.
Investors must adopt a balanced approach, incorporating both styles in their portfolios.
Friendlier government policies, greater demand and better supply of coal have fuelled investor interest.
Goa, Uttarakhand and Meghalaya will initiate schemes to enable 24x7 power to consumers.
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