Power Drain : Hidden Subsidies to Conventional Power in India

In this study have covered 19 power projects from across the country from the thermal (both coal and gas-based) and hydro sectors. Only normal projects have been selected. Abnormal projects like the infamous Enron project in Maharashtra, which has by now sunk thousands of corers in subsidies, have been excluded. Likewise, nuclear power projects, which enjoy considerable hidden subsidies, have been excluded primarily because of the difficulty in getting accurate information about them and also because of the sensitive nature of such information. Thus the things of the study, by avoiding exceptional cases of excessive subsidies, correctly reflect the average and moderate situation. In the 19 projects studied, the cumulative subsidies amounted to 150% of the original investment. Across the board, the figure will be much higher because of many wasteful investments in conventional power, not studied by us. But even the figure of 150% is enough to dispel the widespread belief about cheap conventional power. The myth that renewable power is the only one that is subsidized has been exploded. The second belief that renewable power is expensive is also a myth The findings of this current study and the study on externalities when completed will help in creating a level playing field for renewable, in terms of fiscal support mechanisms like generation-based incentives and appropriate feed-in tariffs. That is the time when real transition to sustainable energy will begin.