Power Ministry asks state to expedite reforms, advises to stick to PPAs

As the Centre passes on the baton to the states to take forward the reforms, payment delay by power distribution companies resulting in over dues to power generators is a major cause of worry

With the country achieving electrification for all households, the Union ministry of power is gearing up for another set of reforms – to improve the availability and quality of power. 

The two-day state power ministers’ conference this week will see the Centre telling states to expedite supply reforms, renewable capacity addition and improve energy efficiency standards. As the Centre passes the baton to the states to take forward the reforms, payment delay by power distribution companies (discoms), resulting in over dues to power generators, is a major cause of worry. 

At the same time, several states are reviewing or cancelling power purchase agreements (PPAs) with renewable power projects. 

In its agenda note, the Centre has issued an advisory, asking states not to reopen power purchase agreements. “PPAs should not be re-negotiated and the provisions under the PPAs should be enforced in letter and spirit. There should also be timely payment to generators (solar/wind power) by discoms on a first-in first-out (FIFO) basis,” said the agenda. 

This time, the bi-annual conference would be held near the Statue of Unity (of Sardar Vallabhbhai Patel), the tallest structure in the world. The congregation of the energy departments of all states would be on the banks of the Narmada, which was the first river to have a canal top solar power plant in India. Gujarat was also the first state to award solar power projects in 2008-09.

Schemes to promote clean energy will be the prime focus of the conference this time. KUSUM aims at providing solar-run irrigation pumps to farmers. This scheme has three components — 10,000 Mw of solar-run pumps on arid lands to be set up by farmers who will sell power to the state, 1.75 million solar pumps for irrigation and solarisation of 10 lakh existing grid-connected pumps. 

State-wise requirement of these pumps is, however, not available yet. The Centre plans to urge states to launch a rigorous awareness campaign and undertake advance planning for implementation.

Another scheme, which would need support of states, is the Centre’s increased focus on rooftop solar projects. Tenders for these projects to be installed on commercial locations would be issued by state-owned discoms soon. An integrated portal for application and processing of implementation would also have to be set up by the states.

The Centre also further plans to ask states to ensure curtailment of renewable power is resorted to only for grid security reasons and through a transparent process. 

Andhra Pradesh has been curtailing use of renewable power from July. It, along with Tamil Nadu and Telangana, owe the highest amount to renewable power developers.

To further promote renewable power projects, the Centre would also push states to consider exempting solar and wind power projects as green activity for which conversion in land use is not required, said the agenda. The Centre also plans to crack the whip on states for power outages. “To ensure 24x7 availability of reliable and quality power in the country, the central government is also mulling imposing penalty on discoms for undertaking unscheduled power cuts,” said the agenda note. 

To strengthen last-mile transmission and distribution network of the state to ensure seamless power supply, the Centre has set the deadline of March 2020 to complete all IPDS-related strengthening work. The IPDS is the system strethening scheme of the Centre. 

States must ensure metering of feeders and distribution transformers, along with centralised collection of the meter data for monitoring and analysis by next year. 

States are also expected to ensure rigorous monitoring and review along with quality checks, said the note. 

Shifting gears

•  Aggressive implementation of KUSUM scheme for solar-run irrigation pumps 
• Expediting solar power projects with better land policies 
• Timely payment to power generators, penalty on default
• Completion and closure of all power infrastructure schemes by 2020 
• Promotion of hydropower and pump storage projects 
• Discoms to comply with the mandatory provisions of Energy Conservation Act, 2001