The Central Government’s efforts to award coal linkages under its Shakti policy to independent power projects having long-term PPAs on an auction basis will have a positive impact on coal-based power plants, rating agency ICRA has said.
Said Sabyasachi Majumdar, Group Head & Senior Vice President, ICRA: “On the positive side, the availability of coal linkage would enable the plants to declare normative availability, allowing recovery of fixed charges and improve merit order position. The winning bidders can offset the discount offered in tariff to some extent through efficiency gains in station heat rate and auxiliary consumption. Further, the higher discount in tariff would be positive for the distribution utilities.”
