India Markets close in 5 hrs 41 mins

Revision of renewable energy PPAs in Andhra Pradesh unfortunate: RK Singh

FE Bureau
Since FY15, FDI in the renewable energy sector has been a substantial .8 billion

Terming the revision of power purchase agreements (PPAs) for wind and solar plants in Andhra Pradesh as "unfortunate", Union power minister RK Singh on Monday said "foreign investments have been coming in the country’s renewable energy sector on the faith of sanctity of contracts".

The Andhra Pradesh government had formed a committee to revise "abnormally priced wind and solar" PPAs, saying these might have been inked with "malafide intentions" and could have "resulted in unjustified burden on consumers of the state".

"If there is any concrete and specific evidence of illegality, go ahead and take action as per law," Singh said while addressing the media in Hyderabad about the achievements of the government in the first 100 days. "But contracts cannot be re-opened across the board."

Since FY15, FDI in the renewable energy sector has been a substantial $4.8 billion. The FY19 losses of AP discoms were Rs 1,563 crore, which the newly-elected state government has attributed to "high cost renewable energy purchases". The state's aggregate technical and commercial losses - a benchmark for power pilferage and discom inefficiency - of 4.5% is one of the lowest in the country. Interestingly, discoms’ losses stood at Rs 172 crore at the end of June, as its renewable energy dues keep mounting.

According to official data, AP discoms owed Rs 2,509 crore to renewable units as on July 31, which was 26% of the combined dues of Rs 9,736 crore of the country's discoms to 26,725 MW of renewable energy projects.

Had Greenko not withdrawn the data of outstanding dues from discoms, the unpaid amount would have been higher at Rs 11,458 crore. Notably, Greenko is one of the three companies (ReNew and Mytrah being the other two) referred to in Andhra Pradesh chief minister YS Jaganmohan Reddy's recent letter to Prime Minister Narendra Modi as firms which bagged most renewable contracts "at exorbitant tariffs".

New power tariff policy in offing

The Centre will soon implement a new power tariff policy which aims to safeguard interests of the consumer and redress grievances in a time-bound manner. Union power minister RK Singh said the proposed tariff policy, which is awaiting approval from the Cabinet, will also help consumers to choose power connection from multiple suppliers.

Singh said the new policy would also allow power distribution companies to be penalised for resorting to load-shedding. "For the first time in the power sector, a Bill of Rights of consumers will be introduced," he said, adding that "discoms can't put the burden of their inefficiency on consumers anymore". - fe bureau