The target on renewable power must be reassessed
India’s power sector is facing a conundrum. While existing power plants are suffering from low utilisation rates of about 60%, or are lying stranded for either want of fuel or power purchase agreement (PPA), there is a brisk addition of new renewable and thermal capacities through public sector undertakings (PSUs).
Today, India’s grid-connected installed capacity is 310 GW, while the peak power demand is only 170 GW. Under-utilisation of existing assets affects the profitability of power companies, hampers their capacity to service debt obligations and increases their risk of becoming non-performing assets (NPAs). There is an estimated 90 GW of grid-connected power capacity that is stranded. Solving this challenge will result in two major benefits. One, it will boost ‘Make in India’ by generating more employment, and, two, it will ensure power to all.