Weak demand and non-committal power distribution companies (discoms) are undermining the central government’s efforts to revive the thermal power sector.
The government is set to conduct an auction to procure 2,500 MW of electricity for three years and sell it to power distribution companies this month. A similar attempt in 2019 received a tepid response from buyers, leading to the cancellation of the auction.
The fate of this month’s auction remains uncertain as well. With demand weakening, discoms have no reason to commit to long-term purchases in a hurry.
