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Ministry of New and Renewable Energy wants utilities to pay for renewable energy first

According to reports, in view of the weak financial conditions of the electricity distribution companies, the Ministry of New and Renewable Energy (MNRE) is trying ensure timely payments to the renewable energy project developers. It is already started discussions with the SERCs to figure out the modalities and soon going to write them to ensure first priority to the renewable power producers when it comes to payments.

Meanwhile, the ministry also plans to float new venture to promote electricity generation from biomass on the lines of recently formed Solar Power Corporation of India.

“It has come our notice that renewable project developers are not able to get their payments in time from the cash strapped state utilities. It is discouraging for small investors in environment friendly projects when we are aiming to achieve ambitious targets. Only couple of state utilities are paying renewable project developers in time and there should be legal framework in place to ensure timely payments to the investors,” Tarun Kumar, joint secretary of MNRE told ET on Thursday.

He added that MNRE is planning to create a fund for financing renewable projects, as banks are not very optimistic about lending money to power projects anymore. India wants to add 30,000 mw of renewable power projects during the 12th Plan and envisages investments to the tune of Rs 2,50,000 crore.

“We are pursuing state governments to embrace renewable energy. To facilitate them, we are evaluating possibilities of forming a venture for energy from biomass. There is also lack of uniformity of definition of ‘renewable’ energy and we are soon going to sort out this issue,” said Kapoor. He added that MNRE wants to discourage power producers banking on fuel like diesel.

According to him, only half a dozen states including Maharashtra, Tamil Nadu, Karnataka, Gujarat, Rajasthan and Chhattisgarh have taken renewable energy seriously and the ministry will pursue other states to follow the suit. The ministry is confident of India achieving target of installing 3,000 mw of solar power capacity by 2013. “India has already installed close to 1,000 mw of solar power generation capacity and much more is on way. The bigger challenges will be installing 10,000 mw of capacity by 2017. The ministry has already set up 51 Solar Radiation Resource Assessment stations to measure solar radiation and planning to add 60 more at an average investment of Rs 35 lakh each to cover entire India,” said Kapoor.

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