Energy Power, Renewable, Solar, solar parks, Wind Power

Rajasthan: Wind power firms left in the lurch

The wind power generators have also been facing liquidity crunch as the three discoms have failed to pay dues of Rs 843 crore that has accumulated since September 2018

Despite power regulator Rajasthan Electricity Regulatory Commission (RERC) reversing an order passed by the previous government last year and bringing in fresh norms to ensure continuity in renewable power purchase, Rajasthan Vidyut Utpadan Nigam Ltd (RVUNL) is yet to sign power purchase agreement (PPAs) with generators that expired in March this year.

The wind power generators have also been facing liquidity crunch as the three discoms have failed to pay dues of Rs 843 crore that has accumulated since September 2018. While the RUVNL continues to consume the power generated by these companies even after March, the generators are unable to raise invoice as there is no new PPA.

“The reasons are best known to the government why they are not renewing the PPAs despite us agreeing to the new price formula that lowered the rates. The delay has compounded our woes. First, our dues of Rs 843 crore have been pending and secondly, we have not been able raise invoice since April this year,” said Rajendra Vyas, president of Rajasthan Chapter, Indian Wind Power Association.

In July last year, RVUNL had written to the power developers not to continue PPAs as the cost of renewable energy has declined significantly over the past five years (the tenure of the PPAs) and wanted them to lower the prices as per the prices discovered in recent biddings. The PPAs were signed for five years even as the projects have a life of 25 years and they were expected to be renewed after five years as a practice in the industry.

In the order passed in March, RERC adopted a pooling price mechanism for the Renewable Energy Certificate projects worth 623 megawatt to arrive at Rs 3.14 per unit for the new PPAs to be signed from the start of this financial year.

But Indian Oil Corporation, which had put up units under the REC mechanism, went to Rajasthan High Court against the RERC’s recommended price of Rs 3.14, citing it the rate was not viable. But most of the projects developers had written to the RVUNL accepting the Rs 3.14 per unit price and urged the agency to sign PPAs.

While hearing the case, the court had also ordered the state government to sign PPAs, saying the same would be subject to final outcome of the writ petition. Vyas also said if the pending dues are not cleared by discoms within 30 days, it has to be paid with interest but the discoms do not pay the full interest.

“The discoms say they don’t have funds to clear the dues as they are yet to receive the subsidy money for the agriculture connections from the government,” added Vyas.