Renewable PPAs in Andhra, Punjab: Power cos write to Centre

Renewable energy producers have raised the problem of states like Andhra Pradesh and Punjab reneging on energy buy agreements (PPAs) and requested that the Punjab Governor veto a Bill that will permit renegotiation of current PPAs within the state.
The Andhra Pradesh authorities is presently in a authorized battle with renewable vitality producers with the intention of renegotiating contracted energy tariffs and the Punjab Assembly has handed a Bill to renegotiate tariffs below current PPAs. Solar energy tariffs have fallen drastically over the previous 5 years resulting in energy bought below earlier photo voltaic PPAs being considerably dearer than costs below newer PPAs.
In a letter to the Union Power Minister, the Association of Power Producers (APP) mentioned the transfer by the Punjab authorities might put Rs 27,000 crore of funding in jeopardy and result in an increase in non-performing property in banks. “We have recommended that the Punjab Bill (Punjab Energy Security, Termination of PPAs and Redetermination of Power Tariff Bill), not be given approval by the Governor since it overrides the Electricity Act,” mentioned Rajiv Ranjan Mishra, managing director, Apraava Energy.
Industry representatives famous that technological breakthroughs had led to a pointy decline in costs however investments made earlier had been based mostly on a worth discovery mechanism and the expertise on the time.

“Andhra Pradesh and Punjab have gone again on a majority of renewable PPAs. If you settle for cancellation of PPAs due to a technological breakthrough bringing down tariffs, then you must settle for all cancellations as and when a breakthrough leads to worth discount. For investments to proceed and if we now have to fulfill our goal of 500 GW of renewable energy capability, we have to make sure that earlier contracts are honoured, “ mentioned Ashok Khurana, DG, APP.
The Power Ministry didn’t reply to emailed requests for remark by The Indian Express.
The ministry had earlier written to the Andhra Pradesh authorities asking the state to respect PPAs. Credit scores company Crisil had estimated that the transfer the Andhra authorities might result in monetary misery for five.2 GW of renewable vitality tasks with debt publicity of Rs 21,000 crore.

Experts famous that in addition to the strikes by the 2 states to renegotiate contracts, renewable vitality producers have confronted of huge dues from state discoms.
Mishra, quoted above, mentioned, “Besides moves to renege on contracts, a number of states have large dues to renewable power producers. States like Madhya Pradesh,Maharashtra, Tamil Nadu and Telangana have large overdues of as much as 9-10 months.”
Power Minster RK Singh mentioned final week that no funding for renewable vitality would come if traders discovered that energy was not being paid for, including that dues to the renewables sectors had been value about 11 months of energy provide.