Power Off

Thermal Power Projects Are Staring at a Bleak Future as Renewables Surpass Them in Capacity Addition.

- P.B. Jayakumar

In 2000 and 2001, California in the US faced a power crisis. There were frequent blackouts during peak hours and shortage caused power prices to rise up to 20 times. This was despite the installed capacity of 45 GW being much higher than the demand of 28 GW. Later, it came to light that some energy traders, in collusion with Enron, were shutting down lines during peak hours to create artificial demand. This made a couple of large energy utilities bankrupt. This is now a case study on distortions in the power market.

Observers of India’s power sector say there is a likelihood of a crisis here too. “Solar power will, in our view, put pressure on power prices and erode margins of generators, along the lines of what occurred in California,” says a recent Morgan Stanley report on the power sector. It downgraded power utilities, saying that renewable energy can cause a major disruption for the thermal players.