After Central intervention State Governments Agree to Sigh PPA

Following intervention by the central government, several Indian states have agreed to move ahead with power purchase agreements (PPAs) with solar and wind energy project developers.

Utilities in the state of Karnataka have decided to sign pending PPAs with wind energy developers. The utilities had earlier refused to sign these PPAs as they were under the feed-in tariff regime, and recently the introduced auction policy reduced the tariffs significantly.

The Ministry of New & Renewable Energy had asked states rich in wind energy to honor the PPAs for power projects which were commissioned when capital cost was higher.

Similarly, power utilities in the state of Andhra Pradesh which had earlier refused to sign a power purchase agreement with the 250 megawatt solar power project secured by Solairedirect at a rate of Rs 3.15/kWh has now agreed to sign with a rider that NTPC will ‘bundle’ 125 megawatts of coal-based electricity with the 250 megawatts of solar power. This would ensure that the overall cost of the electricity procurement is lower than Rs 3.15/kWh.

Uttar Pradesh has also approved PPAs with nine companies at a tariff of Rs 7.02/kWh (¢11.0/kWh). The tariff, which was discovered through a competitive auction process, is still higher than the current lowest tariff bid in India of Rs 2.44/kWh . The state utilities and the regulatory commission had objected to the high tariff bids compared to the bids seen in other states.