KSEBOA - KSEB Officers' Association

Thursday
Oct 19th
Text size
  • Increase font size
  • Default font size
  • Decrease font size
Home News Power Sector News New power project launches to slow down in 2012: Fitch

New power project launches to slow down in 2012: Fitch

PDF
Hits smaller text tool iconmedium text tool iconlarger text tool icon
Fitch ratingsPainting a gloomy picture of the power sector, Fitch Ratings  said that a slew of factors, including pricier fuel and higher interest rates, will result in a slowdown in the launch of new power generation projects in 2012. In its '2012 Outlook: Indian Power' report, global ratings agency Fitch said the power sector would remain exposed to both fuel availability and price risks during 2012.

"Launch of new generation projects will slow down in 2012 because of lower investor interest over fuel availability, softening of merchant power prices, higher fuel costs, higher interest rates and slow progress on reforms at distribution level," Fitch said.

About 8,000 to 10,000 MW of new capacity is expected to be added this year.

"Fresh investment is unlikely to pick up (power sector) in 2012," Salil Garg, the director of ratings agency Fitch's Asia-Pacific Utilities team, told PTI.

Furthermore, access to capital would be "restricted" for weaker entities, including State Power Utilities (SPUs) and greenfield projects, the report said.

According to the report, domestic fuel availability would be low compared to the rising demand from power projects on account of environmental and land issues faced by Coal India.

Against this backdrop, power project developers would be increasingly dependent on imported coal.

"... However, the cost of imported coal and boiler design will play an important role in deciding the overall use of imported coal and hence, the overall capacity that can be commissioned," the report noted.

Fitch pointed out that the financial profile of SPUs is weak due to the lack of cost-reflective retail tariffs, delays in receipt of subsidy payments and high transmission and distribution losses.

The overall book losses of all SPUs stood at Rs 29,500 crore in FY'10, compared to just Rs 7,000 crore in FY'06. Most of the losses were in the power distribution segment.

Late last year, the high-level Shunglu panel on the financial position of distribution utilities had come out with various recommendations to improve the situation, including independence of the regulator and lowering T&D losses.

Fitch noted that implementing the Shunglu Committee suggestions would be challenging.

Source- Economic Times

 

Add comment


Security code
Refresh


 

Random Videos

You need Flash player 6+ and JavaScript enabled to view this video.
Title: Power Quiz 2015 Final - Part-1

Latest Comments

Banner

Reference Book

 

Reference Book on Power

Electrical Engineering-- D' 1/4 Size Hard bound-- 1424 Pages-- Just Rs.1000/- only &n...

Visitors Counter

mod_vvisit_countermod_vvisit_countermod_vvisit_countermod_vvisit_countermod_vvisit_countermod_vvisit_countermod_vvisit_countermod_vvisit_counter
mod_vvisit_counterToday575
mod_vvisit_counterYesterday3990
mod_vvisit_counterThis Month86083
mod_vvisit_counterLast Month134230

Online Visitors: 63
IP: 54.81.131.189
,
Time: 03 : 16 : 41