Coal and power demand to boost recovery for thermal power sector

25 Sep 2024 CW Team

The report attributes these improvements to a 6-7% rise in power consumption this fiscal, spurred by growing demand from the commercial and industrial sectors and continued urbanisation. Government efforts to boost coal availability led to an 8.8% increase last fiscal, resulting in healthy coal inventories that will support uninterrupted operations.

Mohit Makhija, Senior Director, CRISIL Ratings, highlighted the positive trend, stating, "The operating performance and cash flows of stressed TPPs will strengthen this fiscal, with timely payments from discoms enhancing liquidity. The receivables for thermal plants rated by us have improved to 185 days as of March 31, 2024, down from 200 days a year earlier."

The analysis focuses on stressed TPPs with principal debt of approximately Rs 180 billion across 4 GW, accounting for about 50% of the operational TPP capacity under ARCs. Increased coal availability, along with strong demand from discoms and higher merchant sales, is expected to raise the average plant load factor (PLF) for stressed TPPs to around 70%, up from 66% in 2023.

Meanwhile, around 5 GW of thermal capacity with over Rs 500 billion in debt is awaiting resolution under the Insolvency and Bankruptcy Code. These capacities faced stress due to over-leverage, project delays, and lack of power purchase agreements (PPAs) during 2018-2019. However, about 55% of this capacity could be operationalised with fresh investment, and 45% already have PPAs in place, with an additional 3 GW having the necessary groundwork for expansion.

Sushant Sarode, Director, CRISIL Ratings, noted that investors looking to resolve stressed TPPs will benefit from faster supply additions compared to greenfield projects. Large companies are expected to invest in these assets, as seen in the strategic buyouts of 11 GW of stressed capacity over the past three fiscals.

The continuation of favorable fuel supply policies and discom payments, along with the resolution of stressed assets, will be key factors to watch in the coming months.

(ET)

Asset Reconstruction Companies (ARCs) are set for a significant rise in recovery rates from stressed operational thermal power plants (TPPs) in the next fiscal, according to a report by CRISIL Ratings. Recovery rates are projected to increase by 700-900 basis points, reaching 83-85%, driven by higher power consumption, improved coal supply, and consistent payments from distribution companies (discoms). The report attributes these improvements to a 6-7% rise in power consumption this fiscal, spurred by growing demand from the commercial and industrial sectors and continued urbanisation. Government efforts to boost coal availability led to an 8.8% increase last fiscal, resulting in healthy coal inventories that will support uninterrupted operations. Mohit Makhija, Senior Director, CRISIL Ratings, highlighted the positive trend, stating, The operating performance and cash flows of stressed TPPs will strengthen this fiscal, with timely payments from discoms enhancing liquidity. The receivables for thermal plants rated by us have improved to 185 days as of March 31, 2024, down from 200 days a year earlier. The analysis focuses on stressed TPPs with principal debt of approximately Rs 180 billion across 4 GW, accounting for about 50% of the operational TPP capacity under ARCs. Increased coal availability, along with strong demand from discoms and higher merchant sales, is expected to raise the average plant load factor (PLF) for stressed TPPs to around 70%, up from 66% in 2023. Meanwhile, around 5 GW of thermal capacity with over Rs 500 billion in debt is awaiting resolution under the Insolvency and Bankruptcy Code. These capacities faced stress due to over-leverage, project delays, and lack of power purchase agreements (PPAs) during 2018-2019. However, about 55% of this capacity could be operationalised with fresh investment, and 45% already have PPAs in place, with an additional 3 GW having the necessary groundwork for expansion. Sushant Sarode, Director, CRISIL Ratings, noted that investors looking to resolve stressed TPPs will benefit from faster supply additions compared to greenfield projects. Large companies are expected to invest in these assets, as seen in the strategic buyouts of 11 GW of stressed capacity over the past three fiscals. The continuation of favorable fuel supply policies and discom payments, along with the resolution of stressed assets, will be key factors to watch in the coming months. (ET)

Real Estate

15 Jan 2026

Six Flags Qiddiya City Opens as Saudi Arabia’s First Six Flags Park

AtkinsRéalis, in partnership with Qiddiya Investment Company, has delivered Six Flags Qiddiya City, marking the opening of Saudi Arabia’s first Six Flags theme park and the first Six Flags destination built entirely outside North America. The park is the first of 70 major assets planned within Qiddiya City and represents a key milestone in the Kingdom’s Vision 2030 strategy to develop globally competitive leisure and tourism destinations.The opening ceremony, held under the patronage of HRH Prince Faisal bin Bandar bin Abdulaziz, Governor of Riyadh Province, marks the first major attracti..

Infrastructure Urban

15 Jan 2026

German Chancellor Visits Bosch India Campus in Bengaluru

Strengthening the long-standing partnership between India and Germany, Friedrich Merz, Federal Chancellor of the Federal Republic of Germany, recently visited the Bosch campus at Adugodi, Bengaluru, during his India trip. The delegation was hosted by Guruprasad Mudlapur, President of the Bosch Group in India and Managing Director, Bosch Limited, who showcased key innovations developed in the region.During the visit, the delegation experienced Bosch’s H2ICE demonstrator truck featuring a fully integrated powertrain and telematics system. Bosch India, in collaboration with Bosch Germany, is ad..

Infrastructure Urban

15 Jan 2026

ICC, Maharashtra Sign MoU to Boost Industry Engagement

The Indian Chamber of Commerce (ICC) and the Government of Maharashtra recently signed a Memorandum of Understanding (MoU) to enhance cooperation and deepen engagement between Indian businesses and the State, with a focus on investment facilitation, ease of doing business and sustained industry–government dialogue.The MoU was signed by Dr P Anbalagan, IAS, Principal Secretary (Industry, Investment and Services), Government of Maharashtra, and Dr Rajeev Singh, Director General, ICC, in the presence of leading business representatives.Speaking on the occasion, Dr Anbalagan said the partnership..