October 22, 2020 Read More →

Indexing tariffs for future solar capacity could help steer India from coal

The Hindu Business Line:

The inflation indexation of tariffs for future solar capacity could provide much-needed financial respite to the distressed power distribution sector and help India move away from coal-fired power, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA) and the CEEW-Centre for Energy Finance (CEF).

Zero indexation tariffs have been the norm in India for many years, say co-authors CEEW-CEF Adviser Gagan Sidhu and IEEFA Research Analyst Kashish Shah.

Indian solar power tariffs hit a record low of ₹2.36 per unit in June 2020, with zero inflation indexation for 25 years. The state-owned power distribution companies have not been able to take full advantage of new, cheaper renewable energy due to two-part thermal contracts which command a fixed capacity charge even if no power is drawn. 

[Staff Report]

More: Indexed renewable energy tariffs could save discoms up to 21,880 crore over five years: IEEFA

Posted in: IEEFA In the News

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