India Electricity Prices are Spiking
NEW DELHI -
Electricity prices in India bolted to a record high of 10.6 cents/kWh (INR5.1/kWh) in Q3.
A jolt in Indian spot electricity prices could save Sembcorp Industries' Indian business from further losses, UOB Kay Hian said.
The firm said spot electricity prices in India bolted to a record high of 10.6 cents/kWh (INR5.1/kWh) in Q3 and even hit a 15-minute peak of 20.7 cents/kWh (9.9/kWh). The spike was due to a power supply crunch on higher electricity demand from power distribution companies.
As an effect, Sembcorp Industries' Sembcorp Gayatri Power Limited's (SGPL) losses of $26m in Q1 and $29m in Q2 could narrow down by as much as 30-40%.
On a net basis, SGPL will recognise a significantly higher electricity tariff in 3Q17. By tactically shutting down its Unit #3 for maintenance, Unit #4 effectively had its generation contracted out at the higher short-term PPA tariff of around 7.3 cents/kWh (Rs3.5/kWh).
SGPL also capitalised on the price spike in 3Q17 as it ramped up its plant load factor (PLF) to more than 90%.
“On the back of this, coupled with the effects of reduced finance costs, we expect SGPL’s 3Q17 quarterly core loss to shrink by 30-40% from previous quarters,” UOB Kay Hian said.
Whilst electricity prices have corrected to 7.1 cents/kWh (INR3.4/kWh), the firm said it could still remain elevated on structural factors.
Sembcorp Industries' India operations brought in a robust performance for Q3. PLF for Thermal Powertech Corporation India Limited (TPCIL) hit 91%, whilst it reached 73% for SGPL.
Related News
Nonstop Records For U.S. Natural-Gas-Based Electricity
WASHINGTON - As the hot months linger, it will be natural gas that is leaned on most to supply the electricity that we need to run our air conditioners and keep us cool.
And this is surely a great and important thing: "Heat causes most weather-related deaths, National Weather Service says."
Generally, U.S. gas demand for power in summer is 35-40% higher than what it was five years ago, with so much more coming (see Figure).
The good news is regions across the country are expected to have plenty of reserves to keep up with power demand.
The only exception is ERCOT, covering 90%…
