India Rating maintains negative outlook on thermal power

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India Rating and Research (Ind-Ra) has maintained a negative outlook on the thermal power sector...

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India Rating and Research (Ind-Ra) has maintained a negative outlook on the thermal power sector for the fiscal 2018-19, due to lack of visibility with respect to long-term PPAs.

The ratings agency, in a report, also maintained a stable outlook on the solar sector and revised its outlook on the wind sector to stable from negative for the next financial year.

The report said that the existing excess power tie-up of discoms and PPAs already signed with Central and state sector generating companies, for buying power from 40 GW under construction thermal plants, preclude the need for purchasing power from private thermal plants, under long-term PPAs.

Speaking about renewables, Ind-Ra said it anticipates favourable environment for wind and solar energy sectors, as bids are being driven by Central government agencies, and power purchase agreements (PPAs) becoming favourable to developers.

"Development of guarantee funds by states/bidders, incentives to local solar panel manufacturers and exploring of wind-solar hybrid projects and offshore wind projects indicate a sustaining growth momentum in renewable power," the report said. It added that the bond market was favouring renewable and transmission companies.

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