Retiring old thermal power first hurdle in reducing discom debt of well over Rs 4.78-lakh crore

MANGALURU: The Institute for Energy Economics and Financial Analysis (IEEFA) in its new report has proposed recommendations to reduce financial and operational inefficiencies across India’s power distribution sector, which as of May 2020 had accumulated massive overdue payment liabilities of Rs 116,340 crore ($16 billion) to generation companies while already carrying a total outstanding debt of Rs 478,000 crore ($66 billion) (in FY2018/19).
Authored by Vibhuti Garg and Kashish Shah IEEFA, the report recommends, among other strategies, that discoms work with state governments to retire their old inefficient and expensive thermal power plants as a key pathway to reducing their average cost of power procurement.
“We suggest state-based discoms sit down with state generation utilities and review what old thermal power plants they can retire, given the state of surplus capacity,” says Garg.