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Railways, PPAs, EVs to be growth drivers for power sector

By Swati Deshpande,

Added 10 January 2018

Reveals ASSOCHAM study

power-infra

The image is for representative purpose only

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 Mr D S Rawat.

The Government proposes to amend the law making obligation under PPA, statutorily binding all discoms to have PPAs to cover 100 per cent 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.

(Continued on next page)

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