In a report titled Power Sector — India: Growth in Renewable Energy Capacity Will Challenge Fossil Fuel Operators, issued this week, credit rating and research firm Moody’s Investors Service said the next five to seven years will be especially challenging for fossil fuel-fired power generators in the country.
Moody’s expects India to register a power surplus over that time period, putting pressure on utilization rates for thermal power generators. At the most risk are the nation’s unregulated power firms, which will bear the financial burden of complying with new environmental regulations and a clean energy tax without the ability to recover the costs through guaranteed power prices. à‚
Regulated utilities NTPC and Tata Power, whose portfolios are dominated by fossil fuel-fired plants, benefit from contracted revenues, Moody’s said ” but even their business risk will increase over the long term, the report found.
Abhishek Tyagi, a Moody’s vice-president and senior analyst, said the implications for Indian power generators will depend on their current and planned generation mix, and how they adapt to the evolving policy environment.
Around 35 per cent of the 7.1 GW in new generation capacity India added during the first 11 months of its 2016 fiscal year was from renewables, marking a turn away from previous capacity additions which were largely coal-based.à‚