The expenditure budget of the eight public sector undertakings (PSUs) under the Power Ministry has been proposed to be increased, albeit marginally, by 1.5 per cent to ₹51,470.14 crore in the next financial year, beginning April 2022.
Power PSUs, including NTPC and Power Grid, were allocated a budget expenditure of ₹50,690.52 crore in FY22, while their revised expenditure during the fiscal was slightly lower at ₹49,006.30 crore. Compared to the revised expenditure this fiscal, FY23 BE is higher by 5 per cent.
The highest increase in BE has been made for Satluj Jal Vidyut Nigam (SJVN) at ₹8,000 crore in 2022-23, from the budgeted as well as revised estimate of ₹5,000 crore for 2021-22.
The BE of the country’s biggest power generator, NTPC, has been cut by 5.4 per cent to ₹22,454 crore in FY23. Both BE and RE of the company for the current fiscal stands at ₹23,736 crore. While in the case of transmission giant Power Grid, the BE has been kept flat at ₹7,500 crore in FY23. The firm’s budget and revised expenditure in FY22 stood at ₹7,500 crore.
Investment by hydro power giant NHPC has been scaled down by 8.6 per cent to ₹7,361.05 crore for FY23, compared to the BE of ₹8,057.44 crore. Analysed against the revised estimate of ₹6,772.21 crore this fiscal, the budget estimate of NHPC is higher by 8.7 per cent.
Damodar Valley Corporation’s (DVC) investment has been pegged at ₹2,009.87 crore for the next financial year, which is lower by 20.8 per cent compared to the revised estimate of ₹2,536.95 crore. As against the BE of ₹2,857.06 crore in FY22, the estimate for FY23 is lower by 42.2 per cent.
Tehri Hydro Development Corporation will invest ₹3,207.54 crore in the next fiscal, compared to FY22 RE of ₹2,693.93 crore. The company’s BE for this year was ₹2,730 crore.
Increasing power demand
Overall, the higher expenditure budget bodes well for the power sector PSUs as power demand is expected to increase going ahead. According to India Ratings and Research (Ind-Ra), the overall plant load factor (PLF) of thermal power plants would continue to improve and reach closer to 60 per cent in FY23.
This is given the consistent growth in power demand and continued dependence on coal-based generation in the absence of any major increase in the capacity additions in any other sector except renewables. Furthermore, a lower-than-expected addition in FY23 in renewables would aid the PLF recovery, the agency said.
“Ind-Ra, however, expects the demand growth to come back to a normal level of 6-7 per cent in FY23, given a higher base. The impact of the third Covid wave remains lower on power demand, given the less stringent curbs imposed by local/State governments, although any stringent lockdowns in case of the emergence of any strong Covid wave could derail the growth in power demand,” it added.