After much delay, state electricity
boards or SEBs have decided to execute their plans to buy long-term
power. Jharkhand, Punjab and Maharashtra are looking to call for bids
for power supply over 10-12 years. This would bring relief to generators
like JSW Energy, Jindal Power and Essar Power which have been looking
for such sale opportunities.“SEBs have been delaying their plans to buy long-term power so we are
selling at much shorter terms,” said Sanjay Sagar, the chief executive
officer of JSW Energy at its last quarterly results meet. The company
sells around 50% of its power via merchant route.
Tying up power in long-term agreements would bring in stability to
power generators, helping them keep their average power sales constant.
“Now that state electricity boards have cleared the process of calling
for tenders it would be a great positive for private sector power
generators,” said Rupesh Sankhe, power analyst at Angel Broking.SEBs have been under pressure due to their own credit crunch. Unable
to raise retail power rates, they had piled up huge loans. In the last
one year, many sick SEBs have progressively increased rates, and are now
able to buy power.
Source: Business Standard
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