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Renewable energy finds no favour with discoms

According to reports, reeling under financial burden, the power distribution companies (discoms) in the state are not keen on buying power generated through non-conventional means in view of the high power tariff. None of the three discoms in the state are keen on entering into power purchase agreement (PPA) with alternate energy producers.

This, despite the emphasis on promoting alternate energy sources by the state and union governments.

The only notable PPA entered by state’s power management company was with Welspun Renewable to buy 151 MW solar power generated by it.

The discoms are incurring heavy losses and think that buying power from the alternate energy producers is a costly affair. On the other, the alternate energy producers believe that it will not affect them at all as they can pass it on to their consumers and its impact will be minimal even on consumers. The discoms believe that buying power from conventional sources of energy cost them merely Rs 3 per unit, whereas the cost is as high as Rs 9.30-13 and Rs 8 in case of REC. Still, the MP electricity regulatory commission has made it mandatory for discoms in the state to meet a minimum of 0.60% of their power requirement through alternate sources of energy, which include solar energy.

Talking to TOI, joint managing director of Indore-based solar energy firm, Ujaas, Anurag Mundra, said, “The national tariff policy 2006 mandates the state electricity regulatory commissions (SERC) to fix a minimum percentage of energy purchased from renewable sources of energy. This obligation of purchase of solar power can be met by either direct purchase of solar power, commonly known as preferential power purchase agreement (PPPA)/ special feed in tariff (FIT) or by the purchase of solar renewable exchange certificate (REC) from the power exchange”. Alpha is another solar energy firm in the state which also works on REC model.

The cost of fulfilling the renewable power obligation (RPO) will be included in the tariff charged by the utility companies. As per the estimates and data available the cost of fulfilling state renewable power obligation (SRPO) is around 4-6 paisa per power unit. Hence fulfilling the RPO doesn’t lay any additional burden on the utilities, argue the renewable energy producers.

MD of Welspun Renewable, Vineet Mittal, said, “Among the five firms that had been assigned to supply solar power to the state, only we have completed the financial closure. We hope to start supplying renewable energy to the MP Power Management Co at the rate of Rs 8.05 per unit within a month.”

When contacted, OSD, state’s energy department, Ashok Shukla, said, “We have already bought renewable energy amount8ing to 300 MW. But, we do it on a competitive bidding basis only”.

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