In upward economic trend and better distribution connectivity have set India’s power sector for demand growth, yet it continues to face intrinsic challenges that could still upset the applecart.
Power demand growth is now about 5% compared with historical rates of 8-10%, while thermal generation capacity has gone up significantly in the same period, apart from the addition of large capacity in the renewable energy segment.
The resultant low plant load factors (PLFs) have cascaded financial pressure on banks which now have an exposure of close to ₹2 trillion to thermal power companies.
Notwithstanding the gloom, there is potential for private sector companies to contribute to recovery in the sector. Read More
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