CMIE cuts power generation forecast to 10.8% this fiscal

With the country facing challenges of limited availability of water, coal and natural gas resources, the Centre for Monitoring Indian Economy (CMIE) has lowered its forecast for power generation to 10.8% from 13.2% this fiscal.

"Power generation forecast for 2012-13 is revised downwards to 10.8% from 13.2% projected earlier. The lower-than-anticipated availability of inputs prompted us to revise generation forecast downwards," the economic think-tank said in its monthly review.

The city-based agency further said the power sector is facing raw material crunch with gas and coal witnessing a steep fall in production. Similarly, the poor monsoon has further aggravated the availability of water in reservoirs which are already at lower levels.

CMIE has forecast gas-based generation to fall by 5.7 and revised its coal-based and hydel-based generation to 14.8% from 16.6% and 4% from 6.6%, respectively.

"The biggest gas player Reliance Industries has been reporting a steep fall in gas production. This has impacted gas supply to power plants, which prompted us to revise our gas-based generation forecast downwards," CMIE said.

The agency has also revised domestic coal production forecast by 150 basis points to 6.8% for FY13.

"A change in coal production forecast necessitated revision in coal-based generation forecast as 80-85% of coal requirement is met domestically," it said.

On the hydel front, it said "a downward revision was necessary considering a sharp 10.8% fall in hydel generation during the April-May period. Lower water levels in the reservoirs took a toll on hydel generation during the past two months. Besides, the monsoons got delayed this year and in June it was 29% below normal, which further affected the reservoir level."