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Regulatory challenges, low demand and other bottlenecks slowed down revival of stressed power asset

Government has been putting extraneous efforts for revival of stressed power assets by inviting competitive bids for stressed assets including signing of secure PPA with discoms. Regulatory challenges, weak financial health of discoms and low power demand has decelerated revival of asset, hitherto only about 10% of the 40 GW stressed coal-based capacity achieving revival is under various stages of resolution. In amidst of current market dynamics revival of gas based capacity is uncertain given inadequate availability of domestic gas and the absence of any policy measures for the use of imported R-LNG with subsidy support as well as the measures to incentivize such projects to meet the peaking / ancillary power demand. Also weak financial health is also hampering the sustainability of demand growth and signing of new long-term PPAs. A push for industrialization is need of the hour to ramp up demand of electricity from Industrial segment where demand is staggering at moderation stage. Apart from energy demand growth, the increase in production and supply of domestic coal also remains critical to improving capacity utilisation levels.