Costlier coal is keeping merchant power tariff at 5-year high: CRISIL

Tariffs for merchant power sold on exchanges is driven by high prices of imported coal due to the geopolitical uncertainties stemming from the Russia-Ukraine conflict, and healthy growth in power demand (8-9% on-year), an official statement said.

The high merchant tariffs, together with increasing volumes at exchanges, will benefit 34 giga-watt (GW) out of a total 73 GW private coal-based capacity in India. The remaining private capacity is either fully tied up with discoms or is likely to face coal shortage, the CRISIL analysis indicated.