Hidden costs of renewable power in compulsory purchases of RE for discoms

The challenge at this stage of renewable power induction is to see whether the low tariffs are truly reflective of the cost that state discoms additionally pay for thermal power they are not using

India’s renewable power programme, with tariff bids for solar power hitting new lows every few months, is coming up at the cost of thermal power. The idea is to do exactly that and replace the dirty carbon-fuelled coal power generation with green options. But the manner in which this is being achieved is unwittingly raising costs for renewable power purchases.
 

Solar tariff at Rs 2.14 a kilowatt hour (kw/hr or unit) was the lowest ever after basic customs duty was imposed on solar equipment from July 1, 2021. It was achieved at a recent Madhya Pradesh government auction; and wind