To understand better as to why the industry should be more than cognizant towards the headwinds which signal all red for already struggling power sector of the country, we shall focus on crucial facts as enlisted below:
- Up to the end of February 2021 the installed renewable capacity in the country stood at close to 93 GW of which majority of the capacity is being installed by private players over past 5-6 years at a debt-equity ratio of 70:30;
- The sense of red flag from the state of Andhra Pradesh wherein two state-owned discoms took the move to reopen the contracts for wind developers in early 2020 threatening close to 40 biggest RE developers in the country. This triggered a thought that other states shall fall in the suit as well and will renegotiate the PPAs to discover lower tariffs for already signed PPAs for both solar and wind projects which obviously will not be viable for long-term;
- The extent of delays observed by respective discoms of high RE capacity state discoms and the tune of overdue payments to the largest RE developers in the country, which directly impacts the liquidity profile of the projects;