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Absence of Long Term PPAs Worries Power Developers

News:

Power plants which have started operations since April last year with a total capacity of 13,900 MW are facing financial uncertainties due to insufficient electricity purchase agreements and transmission constraints, India Ratings and Research has said.

Source: NDTV Profit

SNP Insight:

Selling power in the short term market is the only solution left for the power producers which are not into any long term PPAs. This might trouble the developers, as it will lead to stressed financial conditions and further, will question the viability of upcoming power plants in the next fiscal. If this scenario persists small developers might get washed off from the sector, leading to a monopolistic market for developers with deep pockets.

Source: SNP Infra Research