Owing to past bad experiences, long-term PPAs (power purchase agreement) in thermal power unlikely to pick-up in future, with new private investment expected to be largely in the renewable sector
New Delhi, August 21: A report by Praxis Global Alliance and Zetwerk predicted India’s dependence on thermal power, which includes diesel, gas and coal-based electricity generation and contributes 63% of total electricity generation capacity, to reduce to 50% by 2021-22 and 43% by 2026-27 on the back of renewable energy (RE) capacity additions.
The report stated, “India is chasing ambitious Renewable Energy (RE) targets and enhancing its Transmission & Distribution (T&D) infrastructure. Increasing RE use has led to decrease in dependence on coal. Contribution of the thermal sector will reduce to 50% by FY22 and 43% by FY27.”
Praxis Global Alliance, a leading management consulting and advisory firm, and Zetwerk, an Indian B2B marketplace for manufacturing products and services, in their recent study has highlighted the impact of COVID-19 on the overall power sector including key segments like generation, transmission, and distribution.
The installed power generation capacity has increased at 8.6% CAGR over the period FY12-FY19 with renewable energy growing at the fastest pace, the report stated, adding that owing to past bad experiences, long-term PPAs (power purchase agreement) in thermal power are unlikely to pick-up in the future, with new private investment in the generation sector expected largely to be in the renewable sector.
“Government can play an instrumental role in ensuring the good financial health of DISCOMs to ensure cash flow along the supply chain and aggressively chasing the capacity addition targets for renewable energy generation” Aryaman Tandon, Director, Praxis Global Alliance.
“India’s power sector has a great potential to grow post-COVID as demand and power prices have started to recover now,” Amrit, CEO and Co-Founder, Zetwerk.
