Power sector is assuming an important role as a key driver for the economic growth of India. Realizing this fact, Government of India has taken a series of initiatives in the recent past to augment additional-generating reserves.
Power sector is assuming an important role as a key driver for the economic growth of India. Realizing this fact, Government of India has taken a series of initiatives in the recent past to augment additional-generating reserves. One such initiative includes; development of merchant power plants (MPP’s). Merchant power plants are being seen as the supply solution to the energy deficit scenario plaguing the power sector at present. XI Plan estimates 10,000 MW of capacity to be added through MPPs. However, this capacity has not been taken into account while working out the capacity requirement over the Eleventh Plan period as it is not likely to materialize before the Twelfth Plan. The GoI has also reserved coal block with reserves of 3.2 billion tonnes of coal for allotment by Screening Committee of Ministry of Coal (MoC) for merchant and captive plants.
The concept of merchant power is at its infancy in India although it is well established globally. Merchant power business is a high-risk reward business. The possibilities of high returns have attracted several private developers. Gauging the business opportunities originating from the widening demand supply gap and the interest shown by the government for making the Indian power sector investor friendly, large number of players within and outside the power industry has shown interest in merchant power business in India. Though at present India has a power generation capacity of just 2,500 MW based on MPP, over 18,900 MW is under various stages of development in the country. Looking at the likely importance of MPP in the power sector in the near future, SNP Infra Research is coming up with a report titled ‘Merchant Power Plants in India – Way Forward’. This report analyzes the scenario for MPP in details. The report specifically examines:
