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Power Developers Paranoid as DISCOMs Are Unwilling To Buy Power

News

Despite rise in generation capacity, there is weak demand for power, especially from distribution companies (discoms) due to deteriorating finances.  Analysts say growing discom losses will exacerbate the over-capacity situation in the power market. JSW Energy’s Q1 net has seen a dip of 14 per cent due to weak demand and other players, including NTPC, may follow suit.

Source:- BS

SNP Insight

Although the overall installed capacity have risen manifold during the last few years, power procurement remains the biggest threat for the developers. As DISCOMs are unwilling to buy power, due to their weak financial conditions, resulting into increased stranded capacity and dwindling CUF of generating stations. Power Generating Utilities are therefore incurring heavy losses and hence are not able to service their debts, futher if this condition prevails then many generating utilities may even shut down. Need of the hour is to focus on various measures to revitalize the financial conditions of DISCOMs in order to improve the aura for developers.

Source:- SNP Infra Research