PPA row: Stopped by court, Andhra stumps wind energy firms, curtails power in peak season

In a setback to renewable energy companies, Andhra Pradesh discoms curtailed wind power drastically when they are in their peak generating season of the monsoon. The curtailment comes after renewable energy companies won a HC stay on Andhra Pradesh’s  order seeking review of Power Purchase Agreements (PPAs). The newly elected CM Jagan Mohan Reddy wants companies to renegotiate all PPAs signed under the previous government of Chandra Babu Naidu, and get the tariffs down to Rs2.44 per unit. Discord over the state government’s decision to review renewable PPAs could jeopardise an estimated Rs21,000 crore in loans to generators of RE.

Experts said while the state has the right to renegotiate PPAs, the curtailing of power during peak season has left the companies in a shock. The companies have moved the high court over continued curtailment of wind power. The Union power minister has requested the CM to not scrap previous PPAs saying it would send a wrong signal that there’s no sanctity of contracts in the country. 

Ensure ‘must-run’ status for green companies, or cover their losses: Centre to states

Don’t cut down on wind and solar energy except to ensure grid safety, else you will be liable to bear losses incurred by generators, that’s the warning by centre to states. Honour the “must run” status of wind and solar plants, said the letter from the ministry of new and renewable energy to the chief secretaries of all states. This has been seen as a boost to a jittery sector, which has seen mounting debts and uncertainties owing to the ongoing saga in Andhra Pradesh. Amidst the current signals of distress, NITI Aayog chief Amitabh reiterated plans to expand India’s renewable capacity to 330GW by 2030. Speaking at the BNEF summit, Kant further hinged the success of these aspirations on the financial health of discoms and floated the possibility of privatisation in the power sector.

Solar federation to Centre: Lend Rs80 billion to discoms to clear dues 

Sanction funds to loss making state discoms so they can clear dues of renewable energy companies pending for as long as one year, National Solar Energy Federation of India (NSEFI) has requested minister of new and renewable energy. The solar federation said without payments the developers are forced to divert equity meant to fund new projects towards covering current operating shortfalls. 

NSEFI wants the Centre to give a one-time grant of Rs40 billion (~$0.58 billion) to Indian Renewable Energy Development Agency Limited (IREDA), and another Rs40 billion (~$0.58 billion) to be raised by IREDA from borrowings. A corpus of Rs80 billion (~$1.16 billion) for the state DISCOMs, with security safeguards, to clear their dues, Mercom reported. Additionally, the federation has proposed allowing termination of long-term PPAs if bills remain uncleared six months after the due date.

Renewable energy certificate sales down 61% in July

The sales of Renewable Energy Certificates (RECs) dropped by 61% to 6.29 lakh units compared to 16.18 lakh units july last year because of continuing inventory crunch since March 2019. Last month, sales registered a decline of 22%, according to Indian Energy Exchange (IEX) and Power Exchange of India (PXIL), the two power bourses in the country, which are engaged in REC trading. As availability of power from solar and hydro projects contracted long term with discoms increases, availability of RECs on trading platforms has reduced. This has resulted in buy bids exceeding sell bids, and an increase in the value of the certificates. This does not bode well for growth trajectory of renewables in the country and indicates an urgent need to bring more projects under the REC ambit. 

EESL ramps up decentralised solar power initiative, close to achieving 100 MW

State-owned energy service company Energy Efficiency Services Ltd (EESL) has begun utilising vacant plots meant for power sub-stations to set up decentralised solar power plants to provide energy for agricultural activities. According to the energy company, moving sources closer to the consumer can help minimise transmission losses and cut power costs by over half for farmers, thereby also relieving the need for power subsidies in agriculture estimated at Rs65,000 crore. “Thus far, we have set up about 35 MW and within days (before August 15) we will achieve 100 MW capacity, which we managed to do so within months of initiating the plan. Our target is to increase this to 500 MW by next year and possibly have a 2 GW (2,000 MW) within a couple of years,” said Saurabh Kumar, managing director of EESL.

New benchmark costs announced for off-grid solar systems

India released drastically reduced off-grid benchmark costs for the financial year (FY) 2019-20. The new benchmark cost for solar study lamps is Rs160 (~$2.3)/W compared to Rs250 (~$3.6)/W in the general category states, solar street lights (with lithium batteries) will have the benchmark cost of Rs299 (~$4.4)/W compared to Rs435 (~$6.3)/W in 2018. The new benchmark cost for solar power projects up to 10 kW is Rs94 (~$1.4)/W, compared to Rs100 (~$1.5)/W last year. For a capacity of above 10 kW and up to 25 kW, this year’s benchmark cost is Rs84 (~$1.2)/W compared to Rs90 (~$1.3) set for 2018. The benchmark costs are inclusive of costs of installation, commissioning, transportation, insurance, five-year annual maintenance contract, and maintenance contract, Mercom reported.

Livelihood and land issues remain unaddressed as solar farms expand in rural India

Reportage by India Spend has revealed that non-recognition of community lands and local dependence during the land acquisition and the allocations of compensations for the Charanka solar power plant has led to widespread livelihood loss in the pastoralist maldhari community of northwest Gujarat. The Centre’s draft report “Economic Rate of Return for various Renewable Energy Technologies” factors in the cost of land acquisition in its calculations of compensation to farmers, but livelihood loss and social costs have been ignored, reported Indiaspend. 

About The Author

Editorial Team

A team of handpicked and dedicated writers committed to fact check each climate-related statement. Go to the roots and intent of each policy implemented, internationally and at home to help you understand climate better

See author's posts