Retail power prices not high enough to be profitable

Tags: News
At a time when energy is one of the top priority sectors for the in-coming Modi government, US-based Institute for Energy Economics and Financial Analysis (IEEFA) has suggested that the retail electricity prices in India are considerably lower than the level required for the profitable generation of imported coal-fired power, particularly when that coal is sourced from isolated deposits with none of the required infrastructure.

“Many of India’s huge power plants have been unable to source discounted domestic Indian market supplies of coal. This leaves two equally unappealing options – operating well below designed utilisation rates, and/or sourcing significantly more expensive imported coal,” IEEFA said.

Significantly, IEEFA is of the view that wind, solar and hydro facilities can be built faster at lower PPAs. Additionally, the use of renewable energy incorporates a zero fuel cost, such that there is an inbuilt deflationary driver, that is, zero indexation.

Given the recent drive by the RBI to prioritise sustained reduction in inflation, renewables support a series of GoI/ RBI targets. Importing thermal coal achieves none of these goals, and more likely contradicts them, the report said.

ritwikmukherjee

@mydigitalfc.com

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • If the first 17 editions of Saarc were tragedies, Kathmandu was a sham

    Rarely has a regional grouping such as the South Asian Association of Regional Cooperation (Saarc) promised so much and delivered so little.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

By the power of wind, let there be light

In India, the development of wind power began in the ...

Zehra Naqvi

Being unrealistic can be good for you

Depression is a term that most people use very casually ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture