A Ray of Hope, Amid the Gloom
Amidst the chaos seen in the power sector, with 22,000 MW thermal power projects lying idle for the need of coal or gas and lenders taking power generating assets to National Company Law Tribunal (NCLT) to recover dues, the transmission sector- with longer life cycle and lower risks- has exhibited the only ray of hope for investors and developers alike.
Spot power price up 25 per cent, expected to rise further
Prices of power in the spot market in India have risen 25 per cent to Rs 3.97 per unit in March from R 3.20 per unit in January and are expected to shoot further in the near future, owing to a host of structural and seasonal factors, CRISIL Infrastructure Advisory said.
AT&C losses have shown only marginal improvement
The key objective of UDAY was financial turnaround of power distribution companies (discoms), which would have led to purchase of more electricity, reduced load-shedding and improved hours of supply.
Calling for sops
Electricity forms an integral part of the utilities which currently contribute nearly 2.02 per cent to Asia's third largest economy. The nation's power sector has long been grappling with grim infrastructure and ageing transmission - woes that have debilitated the nation's economic health.
Waning hope for UDAY!
Although state discoms have managed to leverage UDAY by paring financial losses from Rs.51,589.51 crore in FY16 to Rs.34,826.87 in FY17, a marginal decrease in AT&C losses seems to be the bone of contention, as what has been envisaged has not been achieved yet, barring bailing-out non-performers.
Competitive bidding will lower procurement costs
The bids are fairly aggressive and assume most of the project risks to play out favourably. For achieving the good returns, generating PLFs of close to 35 per cent will be necessary through the life of the projects. Hence, location of the project will be very critical.
Competitive bidding a blow for wind power sector
CRISIL Research believes the advent of competitive bidding in wind power would change the market landscape and lead to a sharp reduction in tariffs, put pressure on returns across the value chain, and lead to consolidation of the market towards independent power producers.
IndiGrid initial public issue of units to open on May 17
India Grid Trust (IndiGrid), proposes to open on May 17, 2017, an initial public issue of its units for cash at a price band per unit of Rs 98 to Rs 100, aggregating up to Rs 22,500 million. IndiGrid is an infrastructure investment trust (InvIT) established to own inter-state power transmission assets in India. Sterlite Power Grid Ventures Limited and Sterlite Investment Managers Limited are the Sponsor and Investment Manager. Axis Trustee Services Limited is the Trustee of IndiGrid.