According to rating agency Ind-Ra, electricity prices are likely to remain high in the short term due to continued rise in the prices of imported coal.
It was noted that a large part of the increased power generation will continue to be met through coal-fired plants, although coal production is not increasing to the desired level. This is reflected in lower inventory stocks in power plants, and hence, a part of the increased energy demand will have to be met through imported coal, Ind-Ra said.
It said that in view of the expectation of higher prices of imported coal, short-term electricity prices in India are likely to remain high.
Rapid recovery in electricity demand following the second wave of COVID-19, coupled with less-than-sufficient domestic coal production, led to a reduction in coal inventory levels at various power plants.
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