Proposed carbon tax waiver on coal may pose risks to India’s renewables growth: Fitch


PTI, Jan 6, 2020, 3:59 PM IST

New Delhi: Fitch Solutions on Monday said that the centre’s proposed carbon tax waiver on coal may pose substantial downside risks to India’s renewable sector growth.

In a bid to alleviate significant debt levels in the power industry, India has proposed to waive carbon taxes on coal (Rs 400 rupees/tonne), it said.

This comes at a time where aggressive bidding and rapid fall in tariff prices in country’s renewable power auctions have squeezed profit margins for project developers and threatened the economic feasibility of the project pipeline in the renewables sector.

The proposed carbon tax waiver on coal will “weigh on renewables growth,” Fitch Solutions said, adding that the carbon tax waiver was likely to make coal-fired power cheaper, increasing the use of coal.

It expects coal to continue dominating India’s power sector, making up a share of slightly under 70 per cent of the total power generation mix by 2029, with non-hydro renewables at 15.6 per cent.

“We stress that the continued push for lower tariffs in the tender process has already resulted in the undersubscription and cancellation of a few auctions across FY’18 and FY’19,” it said.

Most notably, Tamil Nadu, one of India’s largest renewable energy states, has decided to cease wind and solar auctions for the time being due to undersubscription in the previous two.

Coal-powered projects had faced some headwinds in recent years, noted by multiple project cancellations and stiff competition from non-hydro renewable sources, as the cost of renewables in India has fallen below that of coal and gas.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Ullal: Auto-rickshaw accident near Konaje claims driver’s life

Congress victory in bypolls not a clean chit to CM in MUDA case: R Ashoka

IPL 2025 | Got someone who can do captaincy job: Ricky Ponting on Shreyas Iyer

Bad timing: Fraudsters call senior Indore cop during press briefing to pull off ‘digital arrest’

Kangana says MVA lost in Maharashtra because it disrespected women

UP: Protest over Sambhal mosque survey turns violent; 3 killed, 20 cops among injured

Ranbir Kapoor says he would love to remake grandfather Raj Kapoor’s ‘Shree 420’

Related Articles More

Choose correct ITR to report foreign assets; 2 lakh such returns filed: CBDT official

Air India Express increases flight operations from northeast destinations

Mcap of 8 of top-10 most-valued domestic firms jumps Rs 1.55 lakh cr; HDFC Bank, TCS sparkle

Myntra pilots foray into quick commerce with ‘M-Now’ in select locations of Bengaluru

Never entered into pact to operate airport in Kenya: Adani

MUST WATCH

Coconut Flower

Prakash Belawadi

Naxal Leader Vikram Gowda

Christmas Cake Fruit Mixing

DK Shivakumar


Latest Additions

No one has right to break law: BJP on Sambhal violence

Ullal: Auto-rickshaw accident near Konaje claims driver’s life

Congress victory in bypolls not a clean chit to CM in MUDA case: R Ashoka

IPL 2025 | Got someone who can do captaincy job: Ricky Ponting on Shreyas Iyer

Will review INDI alliance’s dismal performance in Maharashtra, says Tejashwi Yadav

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.