We can expect power tariffs to go up over next couple of years: Sabyasachi Majumdar, ICRA

economictimes.indiatimes.com:

Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA, says “the overall average merchant power tariffs will be on the higher side. So entities, whether they are thermal based players or even some renewable energy players, have some amount of merchant capacity and will definitely make much better money from merchant sales than they have often been in the past, particularly in the late 2018 to 2021 period. They can look forward to better merchant tariffs over the next two to three years.”

Looking at the demand supply in the power sector, it appears that demand is going to be outstripping supply. Would you like to react?
Over the next two to three years, we are expecting demand growth of anywhere between 5% and 6%, depending upon the underlying situation. Our median estimate is somewhere around 5-5.5%. But there could be upsides depending upon how quickly the economy takes off. So we are looking at 5-6% demand growth. At best, the capacity will be barely able to catch up.

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Although we are adding a lot of renewable energy capacity, we must remember that most of the renewable energy capacities have relatively low PLF factors compared to thermal. And the total thermal addition is quite modest. But at the same time, the thermal PLF is also not fully optimal. So there will be a slight worsening of the supply demand position but apart from occasional points in time, let us say April, May or September, there may be very sharp mismatches between supply demands.
Broadly, the