Why India’s Thermal Woes Cast A Shadow Over Renewable Plans

It’s all about the money. The money needed to clean up discoms, and soon, the money needed to clean up the mess in India’s thermal energy sector.

By now, it is well known that one of the biggest impediments to India’s ambitious renewable energy goals is the state of its state distribution firms. Or discoms, as they are called.

These discoms, which ran up a loss of over Rs 27,000 cores in 2019, also happen to owe power generators over Rs 80,000 crores at the same time. These are numbers which have brought the energy industry to a crawl, as power producers struggle to stay afloat without payments coming in on time.

Much has been attempted, in the past as well as in the very recent part, to help ‘manage’ this problem. From missives sent by the Power and MNRE ministry to pay up, to efforts to push the discoms towards a more sustainable model. But even as hopes of a breakthrough solution goes up, with yet another large scheme outlined, a much more serious issues is looming large on the horizon.

India’s massive stranded thermal assets. In fact, here too, efforts have been made to throw these new thermal plants a lifeline, in the form of short term sales contracts, but clearly, those are not enough. Even at prices much higher than renewable energy prices today.

The numbers here are even more scary. To understand the scale of this issue, look at just a single week’s snapshot, of petitions piling up at the Central Power Regulator, (CERC).

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