Higher power rates
due to low plant utilisation, say Par panel
Outlook India, March
The panel is
of the view that it is in favour of promoting competition in the
sector but the Power Ministry should ensure that this transition
should take place without harming and discouraging further
investments in power sector
Low capacity utilisation of power plants is the prime reason for
high electricity tariffs, a Parliamentary panel has said in a
"The committee are of definite opinion that the prime reason for
higher tariff is lower PLF (plant load factor or capacity
utilisation)," Parliamentary Standing Committee on Energy said
in its report tabled in Parliament today.
The panel noted that the power sector seems to be trapped in
vicious cycle of low PLF causing high tariff and high tariff
suppressing the demand.
It observed that PLF of thermal power plants touched record low
and dipped below 60 per cent during the previous year and
several of those are running at 0-40 per cent of PLF.
The committee said that it is not a desired scenario as it is
known that under utilisation of power plants will only lead to
higher tariff rates.
It observed that despite abundance of power generation capacity
in the country at present, the tariffs have not gone down,
rather there is an increasing trend in this regard.
The panel is of the view that it is in favour of promoting
competition in the sector but the Power Ministry should ensure
that this transition should take place without harming and
discouraging further investments in power sector.
About hydro sector it said that instead of isolated efforts
there is an urgent need for comprehensive plant for alleviating
the concern of this sector by providing long term finances at
lower rates, grant of clearances in a time bound manner,
development of enabling infrastructure, improving law and order
situation and sensitisation of local people about the benefits
of projects development.
Yesterday, Power Minister Piyush Goyal had told the Lok Sabha
that of 44 hydro electric projects (HEP) above 25 MW under
construction presently, 20 plants totalling 6,329 MW are
stalled/stressed and an amount of Rs 30,147.08 crore has already
been spent on these HEPs.
The panel said that the government should make all efforts that
can boost the demand of power by providing electricity access to
all households, bringing down tariff of electricity etc.
It also said that the price discovery for any kind of
electricity whether thermal, hydro, renewable, etc., should be
done through process of competitive bidding only in view of
keeping hydro power out of the purview of this system.
The panel said that the definition of electrified villages
should be amended and a village should be treated as electrified
only after the 100 per cent electrification of the entire
village is done.
At present, a villages is declared electrified if among other
required infrastructure it has at least 10 per cent of its
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