POWER

Power sector stress building up from well before Covid-19

Discoms’ over dues to gencos for the power supplied has risen to ₹ 1.19 lakh crore as of June. This is significantly higher than the dues in the June-end month of previous years. But it is to be noted that the Genco-Discom dues were abnormally closer to ₹ one lakh crore in earlier months of 2020 too.

The overdue in January itself stood at ₹ 95,813 crore.

This means that the stress in the sector has just been aggravated by Covid-19 lockdowns, and not caused just by it. As of June-end, discoms across the country owe ₹ 1,09,804.22 crore to conventional gencos (predominantly thermal power plants) and ₹ 10,111.44 crore to non-conventional or renewable energy power generation companies.

The general argument given for this is that Covid-19 has led to a slump in billing and therefore discoms are not able to make payments to Gencos. The first Covid-19 lockdown was imposed on March 23, 2020. These lockdowns were extended and had brought industrial activity to a halt in the country.

Source
the hindu businessline
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