With Letter of Credit for payment being made mandatory for power distribution companies, the government is working to ensure no new losses are created by the discoms, said RK Singh, minister of power and renewable energy in an exclusive interview to CNBC-TV18.
As of June 2019, distribution companies owe Rs 32,532 crore to the power generating companies, the all India average power supply losses are at about 20 percent against the target of 15 percent.
On being asked if the government was looking at enforcing franchisee model for reducing losses on billing and collection, Singh said, "Working on a new franchise model. Franchise model will address losses in the power sector and give a choice of models to state governments. I won't push for any one model."
"Buyers for stressed power assets are limited. NTPC carrying out a survey of technically sound power assets. Banks working in different ways make these assets functional. About six of stressed power assets have become standard," Singh said.
He also added that a group of officials is working on revival gas-based projects and seek fee and tax waive off from GAIL and states where these projects are. India has stranded gas-based power projects of about 25,000 MW due to lack of continued gas supply.
With 100 percent FDI approval for commercial mining in the coal sector, the power minister said, "Availability of coal has to increase and need more coal companies apart from government-owned Coal India. We need to bring mining for open sale and access to coal should be de-licenced."
India has a renewable energy commitment of 175 GW capacity by 2020, Singh said and expressed concern on the renegotiation of power purchase agreements of green projects in the state of Andhra Pradesh.
He also added that his government is targetting 40,000 MW capacity on a big scale like Ultra Mega Power Projects in 5-6 states, to bring ease of business in the sector.