Enabling competition between existing companies is more important than bringing in more of them S&P Global researcher said.
|
Government regulation on tariff and investments should complement more competition in power markets as transmission and distribution remain natural monopolies requiring large capital investments, said researchers for the power and renewable sector at S&P Global.
“There’s no ideal setup for other markets to copy from. But the power sector is a very heavy industry. So there’s value for large companies. In this case, particularly the transmission and distribution part, that is a natural monopoly that needs a lot of investment…So in certain areas in the power sector, that government regulations for tariff, for investment and not purely just encouraging competition is also a must,” Jenny Yang, global head of power and renewable research, S&P Global Energy said in an interview with The Hindu, when asked about the growing concentration of large conglomerates in renewable power production, transmission, and distribution in India. Further, the government should incentivise MSME investments into renewables and the power sector.
Enabling competition between existing companies is more important than bringing in more of them, said Ashish Singla, director for south Asia power and renewable research. Besides reforms in market structure, which is not a one size fits all approach, there is also a need to reform market design. “There have been some positive developments in overall market design or market improvement, but still a long way to go,” Mr. Singla said speaking about the future of Indian power sector. Market design refers to regulatory frameworks that govern the pricing, competition and investment
Energy reforms especially in renewable energy, become important particularly in the context of the increased geo-political risk and their spillovers into the economy.
Ms. Yang while agreeing that a U.S.-Iran deal would make things better in the short term, she felt that a prolonged energy uncertainty can push reforms. “The longer the pain, the more serious the pain, the more drastic and permanent that policy shift can be,” she said.
Published – June 19, 2026 06:15 am IST
