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Short Description The all India electricity demand growth slowed down to 4.4% in the first six month of FY20.

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Content <p> </p><p>Resolution of stressed thermal assets remain slow despite various measures undertaken by the government and lenders, with only about 10% of the 40 GW stressed coal-based capacity achieving resolution, mainly through acquisition by a new sponsor, analyst firm ICRA.</p><p>In a report on the sector, ICRA said that the balance capacity is under various stages of resolution, including Insolvency and Bankruptcy Code (IBC). However, resolution of 12 GW gas-based capacity continues to remain uncertain, given the inadequate availability of domestic gas and the absence of any policy measures for the use of imported R-LNG with subsidy support as well as the measures to incentivize such projects to meet the peaking / ancillary power demand. <br><br>“The progress on stressed asset resolution remains slow because of the time taken to achieve resolution, regulatory challenges in securing approvals for projects with existing competitively bid-based power purchase agreements (PPAs), still limited progress in signing of new long-term PPAs and subdued thermal capacity utilization levels,” said Girish Kumar Kadam, sector head & vice president at ICRA Ratings. “Also, improvement in discoms’ financial position remained lower than expected, which can hamper the sustainability of demand growth and signing of new long-term PPAs” <br><br>In one such instance, the Uttar Pradesh Electricity Regulatory Commission issued a tariff order in case of a stressed asset which had been subject to partial debt write-down, directing the acquiring entity to offer tariff discount under the existing PPA. However, this particular order has now been set aside by the Appellate Tribunal for Electricity (APTEL). <br><br>Electricity demand growth slow down to 4.4% in the first six months of FY2020, from 6.0% growth witnessed in the corresponding previous period. The slowdown in electricity demand was primarily witnessed in the months of August 2019 and September 2019, despite a healthy growth of 7.4% in Q1 FY2020. <br><br>The decline in capacity utilisation of thermal power plants is a reversal of improvement witnessed over the past two years. The decline was sharpest for the central sector coal utilities from 70.8% in 6M FY2019 to 64.2% in 6M FY2020. <br><br>Referred from economic times</p><p> </p>

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