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Given the low demand for electricity in Maharashtra, the state government has decided to go slow on new investments in the thermal power sector. Power demand in the state has fallen by 33 per cent due to the pandemic and general economic slowdown.
On Thursday, the State Energy Minister, Nitin Raut, in a meeting with Food and Civil Supplies Minister, Chhagan Bhujbal, said the Energy Department has decided not to set up any new thermal power plants in the state. Moreover, it will try to procure 25 per cent of its demand from non-conventional and renewable sources of power, a media statement issued by the government said.
Raut said due to the economic downturn, the demand for electricity has dropped to 14,500 MW. However, the Maharashtra State Electricity Distribution Co. Ltd (MSEDCL) continues to pay fixed charges as it has entered into power purchase agreements with power generators across the country. The burden of fixed charges is on MSEDCL, the minister said in the statement.
Raut said MSEDCL is required to purchase 8,000 MW of non-conventional and renewable power, therefore, investments in new thermal power plants have been put on hold. The State Electricity Regulatory Commission has also mandated MSEDCL to purchase cheaper electricity. Therefore, power from older plants of the Maharashtra State Power Generation Co Ltd cannot be purchased due to higher rates, the statement said.
Old plants operate at lower efficiency.
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