Acknowledging the fact for higher tariffs due to dip in Plant Load Factor (PLF) of thermal power plants below 60 per cent last year, the Parliamentary Panel on Energy is in favour of promoting competition in the sector which would lead to availability of cheaper power and the companies which follow it, would survive while rest will perish.
The panel-headed by BJP MP Virendra Kumar were apprised that though the tariff is higher for long term PPA, electricity is available in power exchanges at much lower prices. The situation encourages Discoms not to go for a long term PPA, but fulfil their demand by short power purchase as much as possible.
Besides, the committee also noted that several power plants are running 0-40 per cent of PLF.
The Power Ministry stated that due to huge upcoming renewal energy capacity, it is possible that the PLF of thermal power plants could go as low as 50 per cent or even below.
The panel was of the view that in a free business model, only those power plants will survive which will be able to sell electricity at cheaper rate.
The panel also desired that the ministry should ensure that this transition should take place without harming and discouraging further investment in the sector.