Deepak Amitabh, chairman and managing director, PTC India, speaks about his outlook for 2021 for power trading volume and power demand among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:
Q: What is your outlook for 2021, especially in terms of power trading volume? What kind of incremental demand is visible?
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A: The year began on a difficult note, as overall India demand April and August contracted by almost 11%. But it increased by 4% in September as compared to the last year. That is why, I feel, the COVID-induced suppression of demand has gradually ended. Now, the industry and commercial led demand is increasing. It is expected that India’s demand will pick-up completely by March 2021, eliminating surprises, as t is happening now in which suddenly a mall is closed, night curfew is imposed. As far as power trading demand is concerned, PTC did 66 billion units last year. So, as we have told that it will increase this time, how much it will be we don’t know but should be 70+. The way things are improving, it seems that there will be a better improvement in the next three months if there is no surprise. As far as the Indian power market is concerned, you are seeing at the exchange that a lot of volumes is coming. In generation also we are seeing that improvement is coming in renewable. The future generation belongs to the renewable sector, in terms of generation capacity addition. And, now, we are seeing that people who are bidding have turned conscious, who earlier expected a double-digit return on equity in a range of 12-15%. But the figures that are coming, such as a figure of Rs 2 that we have seen in 2016, obviously government provided many benefits in it, then also I feel that people are now expecting a return on equity in single-digit also they seem to be happy with that. A lot of thing on the generation side in the sector is going well. Another side is of DISCOMS, this is a golden opportunity for the DISCOMS to find the ways to improve themselves, like the central government’s Ministry of Power has released the draft electricity amendment and other draft things that are out including the power market regulation draft by CRC. Apart from this, I feel, some improvement can be done by looking at the health of the DISCOMS through the budget. In such a situation, I would like to tell you a simple thing that the electricity sector continued to work well during the COVID due to which India’s economy and internet continued to run smoothly. It has emerged as a priority sector and people have understood the potential of electricity that everything remains connected due to electricity when everything stops. There is a priority lending and can through budgetary we can bring funding of the DISCOMS and the loans that are required for CapEx, just only for the renewable. Through budget can we think of partly introducing loans as a priority lending? RBI has done a good job in which it has set a priority lending limit of up to Rs 15 crore for every renewable energy project for the borrowers. I feel, this Rs 15 crore is a too small amount and can we increase this Rs 15 crore to Rs 100 crore through the budget, only part of the debt. The second thing is the funding of DISCOMS, which is essential because CapEx will be decided there and if an improvement happens there then the sector will get better.