2 min readNew DelhiApr 10, 2018 01:22 AM IST
First published on: Apr 10, 2018 at 01:22 AM IST
Under new mechanism, thermal gencos can set up renewable power plants at their existing power stations, or anywhere else, thus allowing discoms to meet their RPOs through existing PPAs
The power ministry has allowed thermal power generation companies (gencos) the flexibility of using renewable energy sources to meet their contractual generation obligations. The move is aimed at easing complexities faced by electricity distribution companies (discoms) to comply with the mandate of buying a certain portion of electricity from renewable energy sources.
To meet renewable purchase obligations (RPOs), discoms have to find suitable balancing power sources to support the infirm nature of renewable energy, adding to their exisiting financial stress. Under the new mechanism, thermal gencos can set up renewable power plants at their existing power stations, or anywhere else, thus allowing discoms to meet their RPOs through existing PPAs.
Apart from facilitating the mission of having 175 gigawatt (GW) of renewable energy capacity by 2022, the move would also partly insulate thermal gencos from taking the hits stemming from the ongoing transition in the country’s energy mix.
The Central Electricity Regulatory Commission would make necessary regulatory changes to implement the scheme. The Central Electricity Authority will monitor the scheme, and suggest changes and road maps for its success.
According to IDFC Securities, the scheme will allow power generating companies such as NTPC to set up wind/solar power stations and avail of the benefits of this policy, given that some of the power stations located far from pithead have an energy charge higher than Rs 3/unit. In a push to increase the share of green energy in its installed capacity, NTPC has recently come up with tenders for 4,750 MW of wind and solar power projects. FE
Under new mechanism, thermal gencos can set up renewable power plants at their existing power stations, or anywhere else, thus allowing discoms to meet their RPOs through existing PPAs
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