Why the discoms may be pushing their luck too far on renewable power pacts

The sharp decline in the tariffs of renewable power projects is again giving the government headaches. It also exposes the sector to a massive interest rate risk, as data shows most of the dip is built on cheap money.

Early this year, once the bidders had been forced to live without dirt cheap solar modules from China, prices had shot up to Rs 2.92 per kWh (kilowatt hour). But as 2020 draws to a close, prices have slid back massively. A 500-Mw solar auction conducted by Gujarat Urja Vikas Nigam Limited saw four companies offer the winning bid of Rs 1.99 including NTPC, Torrent Power