Maharashtra beats its renewable energy targets, but lags behind in execution of PPAs

One of the early adopters in the wind power sector, Maharashtra is second when it comes to generation of wind power in the country.

Written by Partha Sarahti Biswas | Pune | Published:September 11, 2016 3:56 am

When it comes to generation of Renewable Energy (RE), Maharashtra has managed to exceed its quota. However, the state has lagged behind in execution of power purchase agreements (PPAs), which might hamper further growth and expansion of the sector.

Wind, solar, biomass and small hydro power are the three major non-conventional energy sources in the state. Data released by the Maharashtra Energy Development Agency (MEDA) shows that by the end of 2015, the state had achieved generation of 4,442 MW of wind power, 1,615 MW from biomass, 329 MW from solar and 284 MW from small hydro power projects.

This generation exceeds the targets set by the state government in 2008 for generation of renewable energy from non-conventional sources. The aforesaid targets for wind power project were 2,000 MW, 400 MW of biomass and 100 MW for small hydro power. Such targets are in line with the central government’s promotion of renewable energy which is one of the major objectives of National Action Plan on Climate Change (NAPCC) and Electricity Act, 2003.

One of the early adopters in the wind power sector, Maharashtra is second when it comes to generation of wind power in the country. The state has a potential of 9,400 MW of power that can be generated from wind power and by the end of 2015, 4,442 MW of power generation has been achieved.

The state has been generating wind power since 2006 and on an average, 150-200 MW of capacity has been added year-on-year. 2013-14 had seen 1,074 MW of capacity created — which till date is the highest such creation in a year since 2006. MEDA data shows that by the end of March, 2015, the state has achieved generation of 6,705 MW of power from renewable sources as against the total potential of 13,750 MW that can be realised from renewable sources. Of the 1,37,245 million units of energy generated in the state, 11,836 million units (8.62 per cent) were from renewable sources. The state aims to generate 9 per cent of its energy requirements from renewable sources.

For the last two years, the sector has faced a unique situation which, investors say, can derail further progress. Failure of the Maharashtra State Electricity Distribution Corporation Limited (MSEDCL) to ink the Power Purchase Agreement (PPA) with wind energy generators has put a question mark on the future of these projects. The recent performance audit conducted by the Comptroller and Auditor General (CAG) about the sector noted that MSEDCL had received 50 proposals for execution of PPA with 100 per cent sale to the power utility. However, no PPA has been signed till date despite these projects generating 68.42 million units (MU) and fed to the grid.

The power utility had objected to the higher tariff charged by the projectsas one of the main reasons for not signing the PPA.

MSEDCL had in fact asked for a competitive bidding process but the proposal was rejected by the Maharashtra Electricity Regulator Commission (MERC). The PPAs are yet to be signed. Industry insiders said this failure has put the feasibility of the projects at risk and many of the projects have turned into Non-Performing Accounts (NPA) for the investors.

Minister for Renewable Energy Chandrashekar Baban Kule, when asked about the matter, confirmed the state government is in the process of finding a solution to the issue.

“We have looked into the matter and the process of signing PPA is in the pipeline,” he said.