27 MAR, 2012, JWALIT VYAS, ET BUREAU
National Thermal Power Corporation or NTPC has shown higher capacity availability or plant availability factor during the first two months of the current quarter, indicating improved coal supply, according to data with the Central Electricity Authority.
This augurs well for the state-run company considering that the previous two quarters were not so good for it and earnings declined due to lack of coal availability. This led to concerns over capacity availability of its thermal plants, which is directly linked to availability of coal.
The plant availability factor or PAF of a plant is the maximum time that it can produce electricity over a given period and is mainly linked to fuel availability. Higher the availability of fuel, higher will be the PAF. NTPC's PAF for the first two months of the fourth quarter was 95%.
The company witnessed PAF of 83% and 85% for the second and third quarters of FY12, respectively, while the average for the past four years was close to 90%. Lower fuel availability in the previous two quarters can be attributed to excessive rains, which impacted coal mining and transporting operations.
This was a one-off event. The main reason for the higher availability of coal since January is improved supply of coal from Coal India.
Materialisation of coal from Coal India has been around 95% in the first two quarters of the current quarter. NTPC is hopeful that it will remain at the same level in the coming year too.
Besides this, the fuel supply agreement to be signed according to the advice given by the Prime Minister's Office (PMO) to Coal India will help NTPC secure coal for its 5 GW capacity, which is expected to become operational in FY13.
Fuel shortage and slow capacity addition have led to continuous multiple (valuation) de-rating of the company over the past few years.
Timely commissioning of this capacity, which is in the final stages of execution, and higher availability of coal can be a positive trigger
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