The growing risk profile for thermal power plants is likely to result in increasing cost of capital for them
Two recent events have displayed the financial viability and competitive advantage of investment in renewable energy, as compared to investments in coal-based power. On 11 April, the Supreme Court disallowed Tata Power and Adani Power from charging compensatory tariff to neutralize the price hike of imported coal due to a change in Indonesian regulations. On 9 May, Indian solar tariffs fell to yet another record low of Rs2.44 for Solar Energy Corporation of India’s 500MW project at Bhadla in Rajasthan. What are the implications of these events for India’s rapidly transforming electricity market? They range from balance of payments, capacity utilization, construction delays to financial risks.