The year 2025 is expected to witness more policy actions to tackle high discom debt and measures to meet the rising power demand, says Deloitte India Partner Anujesh Dwivedi. In an interview, Dwivedi said that listing of State power utilities is another key monitorable. Excerpts:
What are the key highlights in 2024?
2024 has been a year of milestones for the power sector. India successfully reached its peak demand at 250 GW on May 30. It is also set to achieve its highest ever annual growth in (terms of) installed power generation capacity by adding around 30 GW in the calendar year. PM Surya Ghar: Muft Bijli Yojna has received a stellar response, resulting in 6.3 lakh installations in just nine months since the scheme’s launch. The reinvigorated reform push for discoms through the multitude of RDSS (Revamped Distribution Sector Scheme), additional borrowing scheme, prudential lending norms, LPS rules and corporate governance guidelines have begun to show signs of improvement. ACS-ARR gap has also come down, and so have AT&C losses.
On the other hand, the sector is grappling with debt sustainability. Discoms’ outstanding debt stood at ₹7.14 lakh crore as of March 2023 and is likely to increase in 2024, as discoms continue to grapple with the ACS-ARR gap.
What are the key developments to watch out for in 2025?
The year 2025 is expected to see incremental policy measures aimed at meeting growing peak demand, accelerating RE capacity addition and advancing domestic manufacturing in the energy sector. On the front of utility reforms, we can expect measures to address accumulation of debt, including an increased appetite for private sector participation in discoms. Focus on energy storage projects (PSP, BESS) is expected to gather momentum.
Any key monitorables for 2025?
The waiver on ISTS charges for RE remains valid until June 2025. It will be interesting to see if the government extends this period. Other key developments include the initiation of the listing process for State power utilities and the growing acceptance of private sector participation in discoms. Additionally, there is potential for introduction of demand response mechanisms and peer-to-peer (P2P) trading, leveraging smart metering and digital infrastructure being implemented by discoms.
