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The peak power demand in FY19 stood at 177 GW (1GW=1,000 MW) and is expected to reach 225.75 GW by the end of FY22.
As India’s leading power producer, NTPC is poised to benefit from the increase in demand for electricity.The plant availability factor (PAF) threshold — the amount of time the power plant is available to generate electricity — is 83 per cent under the norms.Maintenance shut-downs will not be taken into consideration to calculate the PAF. Fixing a standard loss of 85 Kcal/kg on coal when received by thermal power producers, will reduce raw material cost, thus boosting the ROE.It works in two ways; the power plant is either not available for production due to maintenance, repairs or there isn’t enough fuel available to ensure the PAF above the prescribed threshold.NTPC expects the under-recovery in FY19 to be around ₹750 crore, nearly half the ₹1,400 crore figure in FY18.
However, splitting fixed cost recovery into peak and off-peak periods, along with stringent working capital norms, evens out any gains that would have accrued. India’s move towards cleaner power production will not have much impact on NTPC.