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Aggressive Coal Bidding: Boon or Bane for Thermal Power Plants

News

Power sector now stares at higher risk of significant under recovery and concerns on the viability of projects after the generators bid for coal aggressively, ICRA said in a report.

Source: ET

SNP Insight

The aggressive bidding of coal blocks may hold good for the consumers and the distribution companies as the power tariff may reduce. But it may hit the profitability and viability of the coal based power plants who bid aggressively or some case negative price bidding. These power plants may lose money if they fail to pass through the cost to consumers or not able to increase fixed cost in tariff. This may dwindle the investor confidence in future and can be result in choking investment for future coal based power projects.

Source: SNP Infra Research