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
Nord Stream: Norway and Denmark tighten energy infrastructure security after gas pipeline 'attack'
OSLO - Norway and Denmark will increase security and surveillance around their energy infrastructure sites after the alleged sabotage of Russia's Nord Stream gas pipeline in the Baltic Sea.
Major leaks struck two underwater natural gas pipelines running from Russia to Germany, with experts reporting that explosions rattled the Baltic Sea beforehand.
Norway -- an oil-rich nation and Europe's biggest supplier of gas -- will strengthen security at its land and offshore installations, the country's energy minister said.
The Scandinavian country's Petroleum Safety Authority also urged vigilance on Monday after unidentified drones were seen flying near Norway's offshore oil and gas platforms.
"The PSA…
