"A day of worry is more
exhausting than a week of work."
—John Lubbock (British,
1834-1913)
Word for the day
Woodnote (n)
A wild or natural musical
tone, as that of a forest bird.
Malice towards none
Someone advised a PM
aspirant that India has already had prime ministers from north, west and south.
Only eastern India is so far unrepresented.
Did other leaders in eastern
states also eavesdrop to the conversation?
First random thought this morning
Arvind Kejriwal led AAP has been successful in capturing some mind
space of urban populace in the country, at public expense. In many areas, AAP
might have an edge, whenever a need for an alternative to the established
parties is felt by the citizens.
Paradoxically, the party has not been able to make much inroads in
rural mind space where the quintessential Aam Aadmi lives.
Punjab villages, which are arguably most urbanized in the country,
may show the way forward, to all - NDA, Congress, Socialists and of course AAP.
Problem of plenty
The summer this year is forecast to be longer and hotter than
usual. Lower moisture level in soil due to two consecutive drought years and
widespread forest fire in north Indian hills, is making the matter worse.
The consolation however is significantly better availability of
electricity. Unlike past years, so far the availability of electricity is much
better, both in terms of quality and quantity. This is despite much higher energy
intensity of water, lower hydro power generation, and higher household demand
due to hotter than usual weather.
The worst deficit states like Maharashtra, Tamil Nadu, UP & MP
are reportedly not faring much better this year, despite high farm sector demand.
As per government data FY16 saw power deficit shrinking to 2.1%, the lowest
ever.
The improvement in power situation could be attributed to a
variety of factors; for example-
(a) Completion of many
power projects adding to the generation capacity, including renewable projects.
(b) Higher availability of
fuel - cheaper global coal prices, higher local coal production, higher
availability of LNG - augmenting plant load factor of conventional power
producers.
(c) Lower industrial
demand due to - lower capacity utilization, better energy efficiency standards
and cheaper diesel; and slow down in real estate sector growth.
(d) Higher energy
efficiency at household level due to rising use of LED based appliances and
solar energy.
(e) Improvement if health
of SEBs, due to financial restructuring under UDAY scheme.
The market has rightly taken fancy for the electrical appliance
manufacturers, assuming better power availability will boost demand for
appliance. A visit to nearby electronics shop will confirm this.
While the consumers have a reason to be happy, investors, banks
and entities engaged in power supply chain are a worried lot. Impending
completion of 80GW of power generation capacity under construction is just
adding to the jitters.
Coal India had to cut production and shipments of the fuel as
sluggish demand caused stockpiles to swell.
Merchant power producers are struggling to sell their generation
as despite peak summer, demand is benign and rates hovering around
Rs2.7-2.9/kWh. A normal monsoon might further hit the demand.
While my bias against Coal India is well known, I am not too
worried about the others. I believe this period of plenty is an opportunity to
accumulate efficient power producers and distributors. In less than 5yrs, these
could be easily expected to turn into a regular decent dividend paying
utilities in true sense.
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