Stressed assets a key concern for power sector in India: Study

Troubled power sector holds hope in growth drivers

GN Bureau | January 9, 2018


#Stressed assets   #Power Sector   #Assocham  

As many as 24 power projects with 41.81 GW capacity may be under a severe financial stress, but the troubled sector still holds hope in growth drivers including higher demand from the Railways, proposed law to enforce power purchase agreements (PPAs) on the discoms, increasing focus on electric vehicles and reaching electricity to all un-electrified villages, an Assocham study has noted.

“Stressed assets remain a key concern for power sector in India. Out of the 24 stressed projects having capacity of 41.81 GW, 8,300  MWs are without any power purchase agreements (PPA), 9500 MW capacity are having partial PPAs (i.e. less than 40%).  The balance capacity is having PPAs greater than 40%.  Avenues need to be found out to utilize the power available in the stranded capacities, which are already commissioned or nearing completion,” the study stressed.

“Our assessment shows that all is not that bad, as is made out by stock analysts or the bankers getting panicky, having financed the big projects. There are good prospects, provided we are able to enforce PPAs and work on the plans already finalised,” said Assocham secretary general DS Rawat.

The government proposes to amend the law making obligation under PPA, statutorily binding all discoms to have PPAs to cover 100 percent requirement.  While there are insufficient PPAs, even today around 5 crore household remain un-electrified.  Electrification of these household would lead to increase in demand.

Besides, cold storages in the country are mostly run with the help of off-grid power because of reliability issues.  Therefore, demand of the cold storages should be met with grid power by providing necessary infrastructure.

Similarly, Indian Railways have taken great initiative for electrification.  About 50 percent of the railways is presently electrified.  It is expected that the railway load is expected to exceed 3,000 MW by 2021-22 from a current traction load of 2,000 MW thus opening a potential of demand creation.

In view of large capacity addition of renewable energy sources in the country, strict enforcement of renewable purchase obligations (RPO) has become necessary.  In fact one amongst the various amendments proposed in the Electricity Act is the strict enforcement of RPO.

It would require investments in technology, grid balancing, green corridor, in peaking power.  By and large, electricity is emerging as the primary source of energy as electric mobility is more efficient than mobility by petrol or diesel, the only thing required is the prices of the battery of storage systems to come down.

Combination of solar power and Electric Vehicle is the key to significantly reducing our dependence on fossil fuels and are the natural evolution of our energy infrastructure.

In addition, storage is going to be next frontier for India’s clean energy push and the batteries in Electric Vehicles offer a potential solution, the paper added.

 

Comments

 

Other News

Reit: Real estate for retail

Every middle-class Indian dreams of a home coupled withlanded property to live off the rent. However, large initial investment, particularly inmetros, and low yields ensure that real estate is out of the reach of the common man. A return of 7-8 percent from commercial properties is considered highly commen

Maharashtra poll panel rolls out Electors Verification Programme

The Maharashtra State Election Commission has urged the residents to take advantage of the ongoing Electors Verification Programme (EVP) and register their names along with those of the members of their families in the electoral rolls. The drive, which started on November 11, 2019, will continue till Febru

Budget goes to print with Halwa ceremony

The budget season is here, and the annual document has gone to print, beginning the lock-in period till its presentation in parliament on February 1. The Halwa ceremony, marking the commencement of the budget printing process, was held in North Block Monday morning in the presence of finance

‘Desh Apnayen’ is a movement to partner with your country: Vallabh Bhansali

Investment banker, venture capitalist and stock-market expert Vallabh Bhansali is the co-founder and chairman of Enam Group, a pioneering equity research company in the country. He is a promoter of spiritual and cultural traditions and also an expert on development economics, behavioural science and co

Evaluating public-private partnership, the right way

Public-Private Partnerships (PPP) projects are always under scrutiny, given the options of alternative of traditional procurement for the government. The value-for-money debate is one of the essential parameters to judge any PPP. In the absence of any credible data on this regard, it is very difficult to e

Electoral bonds emerge as preferred mode of political donation

Electoral bonds, introduced in January 2018 to bring in transparency in political funding, has emerged as the preferred route for making donations to parties, according to an analysis of the parties’ audit reports by the Association of Democratic Reforms (ADR). “Given the anonymi



Archives

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter