Fuel a great risk to Indian thermal power plants: Deloitte

August 16th, 2011 - 7:51 pm ICT by IANS  

New Delhi, Aug 16 (IANS) Inadequate supplies of fuel is beginning to emerge as the biggest risk to thermal power projects in India, according to a report released by global consultancy and advisory firm Deloitte Tuesday.

“In the Indian context, risk of inadequacies in supply under coal linkages awarded to the projects under construction has increased,” said Deloitte in a global report on Empowering Ideas 2011.

“Investments planned on imported coal are likely to be impacted due to recent changes in the regulatory and tax regimes in resource rich countries like Indonesia and Australia,” it added.

The report, which looked at ten emerging issues in the power and utilities sector, also named the worsening financial situation of distribution utilities in the country as another significant risk for the sector.

“Weak finances of the distribution utilities and the widening gap between their average tariff and cost of supply are big risk factors in the Indian context,” said Deloitte.

The consulting major also said the countries like India, which were looking to use nuclear energy to meet growing demand, needed to take into account the special risks such projects entailed in the wake of the Fukushima nuclear plant disaster in Japan.

The biggest casualty of Fukushima is of the public confidence and opinion about nuclear power. In all democratic countries this will be a big challenge for nuclear energy, said Deloitte.

The report also said that the Indian clean energy sector could see a spurt in merger and acquisition activity in the near future.

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