Solar and Wind Power Procurement Situation is a Mess

Renewable and Coal PPAs are beginning to clash as India increases its renewable generation

Solar and Wind Power Procurement Situation is a Mess

State-run distribution companies (DISCOMs) and negligent state electricity regulatory commissions (SERCs) are creating an obstacle in the path of India’s solar story, according to a letter written by R. K. Singh, Minister for Power, to Minister of Finance, Arun Jaitley.

The contents of the letter portray the reluctance of state-run DISCOMs from procuring solar even at rates below ₹3 (~$0.040)/kWh and the neglect of SERCs towards meeting the renewable purchase obligations (RPOs).

In his letter, Singh wrote, “States already have pre-existing power purchase agreements (PPAs) with different thermal generating units to meet their power requirements.

Payment for thermal power is made on two-part tariff; fixed cost per unit is ₹1.60 (~$0.021)/kWh and the variable cost is ₹1.65 (~$0.0222)/kWh. Average unit cost for thermal comes to ₹3.25 (~$0.0437)/kWh.” Read More

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