BJP victory in Bengal to reshape state’s power sector: JM Financial

A potential political shift in West Bengal could reshape the state’s power sector, with brokerage JM Financial Institutional Securities flagging far-reaching implications when the Bharatiya Janata Party (BJP) will come to power following the recent assembly elections.

The state has long held a prominent place in India’s energy landscape from hosting the country’s first thermal power plant to pioneering rooftop solar and utility-scale renewable projects, alongside the high-performing Purulia pumped hydro facility. Against this backdrop, policy direction under a new government could mark a decisive turning point for both legacy utilities and emerging energy investments.

Advertisement

The most immediate impact is likely to be felt by CESC Limited, the sole electricity distributor in Kolkata. The company has faced sustained scrutiny over tariff hikes, fuel adjustment charges and billing practices, with consumer protests and political opposition intensifying in recent years.

Notably, the BJP, led in the state by Suvendu Adhikari, had earlier mobilised protests against high electricity tariffs, alleging that CESC’s monopoly has placed a heavy burden on households.

Regulatory headwinds have also added to the pressure. The Central Electricity Regulatory Commission (CERC) recently declined to approve a proposed tariff for a wind-solar hybrid project by CESC’s subsidiary, raising concerns around pricing transparency.

In this context, a BJP-led administration is expected to prioritise consumer protection, with measures such as parallel licensing allowing multiple power distributors to operate within the same geography potentially gaining traction under the proposed Electricity (Amendment) Bill, 2025.

The coal ecosystem in the state could also see renewed focus. Coal India Limited operates in West Bengal primarily through Eastern Coalfields, which contributes under 10% of its total output. The subsidiary has grappled with legacy challenges, including ageing underground mines, illegal mining activities and logistical bottlenecks.

Analysts believe a stronger emphasis on law and order could help accelerate project execution and improve operational efficiency.

Coal India’s planned coal gasification project at Dankuni aimed at producing methanol is also expected to gain momentum under a more execution-focused policy regime, potentially positioning the state as a key node in cleaner coal technologies.

Meanwhile, Damodar Valley Corporation (DVC) remains a critical player in the regional power ecosystem. With a diversified portfolio spanning 6,540 MW of thermal and 147 MW of hydro capacity, the PSU operates across both West Bengal and Jharkhand.

Backed by a tripartite ownership structure involving the Centre and state governments, DVC reported revenue of Rs 23,900 crore and a net profit of Rs 1,200 crore in FY25, underscoring its strategic importance in the region’s energy mix.