No way out for Stranded Thermal Assets in India, Amid RE Push : IEEFA
India’s 40 gigawatts (GW) of stressed and stranded thermal power assets, identified by a special parliamentary committee in March 2018, still linger on – most of them without any feasible resolution.
The multitude of fundamental problems still persist despite efforts to resolve them by the government, lending institutions and proponents of the projects. These include lack of appropriate coal linkages, lack of power purchase agreements (PPAs) and capital cost overruns due to delays in acquiring land, accumulated interest funding costs and getting environmental clearances.
For example, some 24.4 GW of the total stranded capacity was fully commissioned, however, 8.2 GW of it lacked PPAs as per the committee’s report.
The IEEFA analysis finds that consecutive years of flattening power demand are extinguishing hopes that a sustained rise in power demand growth might partially revive the stranded capacity without PPAs.
