CHENNAI: Tariff for merchant power sold on exchanges may average more than Rs 6 per unit this quarter — the highest for any quarter in the past five fiscals — 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) said a latest report by Crisil Ratings.
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, said the Crisil analysis. Nearly 100% of the power sold on exchanges by the coal-based gencos is produced using either imported coal or domestic coal procured through e-auctions, whose premiums are linked with imported coal prices.
