“The sector is burdened with stranded-asset risk and is facing great difficulty in accessing finance. Long-term (PPAs) are also drying up and the sector is facing increasing competition from renewable energy sources,” as per the industry source
December 16, 2019. By News Bureau
New capacity addition in thermal and hydro power jumped 69 per cent in the April-November period of this fiscal, as green energy gained momentum.
Data by the (CEA) provides only 1,330 Mw in was added as against 4,300 Mw a year ago, a fall of 69 per cent. New capacity creation in hydro power has reached to a mark dip of 70 per cent, from 465 Mw to 140 Mw, in the period under review. Thermal and hydro together saw their fresh capacity additions tumbling 69 per cent till the end of November in FY19.
“The sector is burdened with stranded-asset risk and is facing great difficulty in accessing finance. Long-term (PPAs) are also drying up and the sector is facing increasing competition from renewable energy sources,” as per the industry source.
The country's capacity fell by 1,100 Mw in the April-October period of the current fiscal, as per a report by US-based Institute for Energy Economics & Financial Analysis. The addition of 600 MW at the Mahan Super Thermal Power Project in Madhya Pradesh was more than offset by the closure of 1,799 MW of capacity, principally at two other plants – 705 Mw at Badarpur Thermal Power Station in NCT of Delhi, and 420 Mw at Ropar Coal Power Station, Punjab.
The IEEFA report states, “Stranded assets commonly reflect a myriad of problems such as outdated technologies, legal issues around land acquisition, a geographical misfit between proposed plant locations and the distance coal supplies must travel, and unviable tariffs. TPP proposals in India general require tariffs at progressively higher rates. As a result, Indian discoms or distribution companies, which purchase electricity for supply to consumers, will not accept them given renewable energy tariffs are the low-cost solution.”
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