Electricity Bills to Hit Roof Next Year in India

Households consuming more electricity in the range of 300 units and above will have to cough up more than Rs.500 to Rs.1,300 next year with the new emission norms coming into effect from Jan 2017.

The Ministry of Environment & Forests has notified the new emission norms for thermal power projects to minimise emission of particulate matter, sulphur dioxide, oxides of nitrogen and mercury and also reduce water consumption. New power plants starting their operations from January 2017 should conform to these norms from the day one of the commissioned date.

Currently, these thermal power companies are producing 187 Gigawatt of operational coal-based capacity and 74 GW of under-development capacity. To conform to the new norms, the thermal power companies need to spend Rs.1.2 lakh crore in the next two to three years, which may shoot up power price by 13 to 22 paise per unit, according to the ratings agency ICRA.

Sabyasachi Majumdar, senior vice president, ICRA Ratings, said: "As per ICRA’s estimates, these norms would entail a capital investment of Rs 60 lakh to Rs 1 crore per MW, based on the age of the plant. This amounts to an aggregate capex requirement of about Rs 1.2 lakh crore, which is likely to materialise over a 2-3 year period, given our assumptions about the implementation delays. This is likely to result in an increase in the cost of generation of such plants by about 13-22 paise/unit on account of the capital charges alone, apart from entailing additional O&M charges."

Since the power generating companies are allowed to pass on the higher cost of generation to the consumers or state-owned distribution utility companies under the power purchase agreement, the burden on end-user will go up by about Rs.1,000 per household on an average.

By the financial year 2019, power generating companies will implement the revised norms, making electricity one of the scarce commodity in the country of 1.3 billion people.

Leave a Reply

Your email address will not be published. Required fields are marked *


This site uses Akismet to reduce spam. Learn how your comment data is processed.