The thermal power sector has been seeing some stress due to competition from solar power and because of solar tariffs coming down to as low as Rs 2.20 to Rs 2.16. Adding to their woes is Uttar Pradesh (UP) government calling off the PPA bids that they had earlier floated for 3000 MegaWatt (MW) of power.
Discussing the issue Ashok Khurana, Director-General, Association of Power Producers told CNBC-TV18 the news was on expected lines because there is a lack of demand.
The power sector is going through transformational changes, renewable energy is coming in, which is good for consumers. However, as this transformation takes place, each segment of the power generation will find its own place in due course. “Thermal power will always remain the mainstay of the Indian power sector because renewables are intermittent and variable,” he said.
According to him, the two myths that are prevailing are the surplus coal ability and power availability.
The fault lies with the policy and regulations, which are much behind the curve to take all these changing elements into power metrics and design the power market, he said.
Although the demand for power in the last three years hasn’t picked up, the fact that economy is picking up, there is ease of doing business, coming up of smart cities, steel demand picking – all this does show that demand will return.
However, affordability of power is also important. According to him, long-term power purchase agreements (PPAs) are a thing of the past, so the power generators, the distributors and the bankers as well have to adjust to short and medium-term PPAs.
“The government and regulators have to form a think tank to think 10-years ahead, and how to absorb the changing elements in the power market, so that all types of power generators can sustain,” he said.
For entire discussion, watch video
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