No relief for power firms
New orders in the sector were 7,900 crore in September quarter, the lowest since 2005 and down 91% from a year ago
Despite the government’s reform push, there is no relief for the power sector on the ground. New orders in the power sector were 7,900 crore in the September quarter, the lowest since 2005 and down 91% from a year ago, according to estimates from Espirito Santo Securities. Not only that, about 64,000 megawatts (MW) of projects have been stalled. The reasons for this are well-known—fuel shortages, land acquisition issues and delays in securing environmental clearances. As the chart shows, fuel supply continues to be the biggest reason. The brokerage firm goes on to note that even “80% fuel supply (under fuel sale agreements signed with Coal India Ltd under the best-case scenario still leaves little incentive for the IPPs (independent power producers) to commit fresh investments".
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