Thermal power sector faces bleak scenario post-Covid situation

Covid-19 may have served a lethal blow to India’s stressed private thermal power generation sector, accounting for 37 per cent of 198-gigawatt coal-based generation capacity.

Dominated by independent power producers (IPP), who do not have distribution rights; the sector tops the chart on loan defaults. The situation may complicate further post-Covid; unless the Centre takes a fresh look at the coal-energy value chain.

Cash-draught

Stung of a series of policy failures; IPPs were suffering from huge payment backlog by stressed State distribution utilities (DISCOM) as well as weak offtake scenario vis-à-vis capacity, for many years now. The power ministry just initiated measures to regularize DISCOM payments, when India went under lockdown.