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Key Updates on Private Sector Power Production and Pricing

In a recent Rajya Sabha session, Shri Shripad Naik, Minister of State for the Ministry of Power, provided detailed insights into private sector power production and pricing trends in India from 2019 to 2024. Power Production Trends: Private sector entities have made significant contributions to power generation across various states, underscoring their pivotal role in India’s energy landscape. The power generation increased from 5,35,066 MUs in FY 2019-20 to FY 6,90,159 Mus in 2023-24. In FY 2024-25(upto Oct 2024), total power generation from provate sector was 4,45,346 MUs. Weighted Average Rate of Sale of Power (WARSP): The WARSP for private sector power fluctuated over the years:

1. Rs 3.959/kWh in 2019-20
2. Rs 3.455/kWh in 2020-21
3. Rs 3.796/kWh in 2021-22
4. Rs 4.038/kWh in 2022-23

For renewable energy sources in 2024:

1. Solar Power: ?2.801/kWh
2. Wind Power: ?2.818/kWh

The government has implemented various mechanisms to ensure fair pricing and transparent operations in the power sector:

1. Regulated Tariffs: DISCOMs procure power at tariffs set by SERCs/CERC under Section 62 of the Electricity Act, ensuring disallowed excessive claims.
2. Competitive Bidding: Power procurement through open competitive bidding under Section 63 allows regulators to adopt tariffs based on a transparent bid process.
3. Market-Driven Pricing: Generators can sell power through exchanges, enabling competitive and market-based pricing.

These steps aim to balance consumer affordability with industry growth, fostering healthy competition while supporting India’s energy transition.