State governments have asked the Centre for money for equipment to help power plants meet new emission norms.
States have an installed capacity of 72.85 GW, which would require equipment worth at least Rs 36,000 crore, but state utilities are financially unviable because of inefficiency, power theft, technical losses and failure to get payments from all customers.
At a meeting with the Union power minister, representatives of states said that old plants need to upgrade or shut down. This follows a Supreme Court order that new norms should be implemented in a phased manner by 2022.
States want money either from the Power System Development Fund (PSDF) or from the Clean Coal Cess to be able to upgrade plants. NTPC, the largest power generator, is spending Rs 31,500 crore on its plants. It has started inviting bids for the equipment, said a company executive.
The additional cost can be passed on to customers but it takes about two years to get regulatory approval, said a state official. â€œLoans from banks for this retrofit are just not available because the power sector has virtually turned untouchable for banks following the large number of bad assets that got created recently,â€ the official told ET on condition of anonymity.
Power producers want this cost to be passed on automatically and say that soft loans can soften the impact on consumers.