As Power minister R.K. Singh responds to Telangana CM KCR, power reforms at risk?

In a release yesterday, the Press Information Bureau(PIB), on behalf of the MNRE (Ministry of New and Renewable Energy) has carried a strong rebuttal from Power Minister R.K. Singh, of statements ascribed to Telangana Chief Minister K Chandrashekar Rao (KCR). R.K. Singh has termed as a ‘lie’, a claim attributed to KCR, that the central government was ‘forcing’ states to buy renewable energy from particular developers.

“The States are free to hold their own bids and buy Renewable Energy from any developer based on those bids. The Solar Energy Corporation of India also conducts open bids for Renewable Energy from time to time. These bids are highly competitive; with numerous companies competing and the companies which offer the least tariff are selected transparently through the open bid. Thereafter, States which desire to buy power from those bids do so, as per their requirement.  Whether they wish to purchase power at the rates finalized in the bids or not is entirely States own decision. They can choose to have their own bids. Therefore, the statement by the Chief Minister was totally false” says the statement.

To another issue regarding RPO’s or Renewable Purchase Obligations for each state, the minister reminds the state/s that “RPO is a part of an International Commitment made by the countries to carry out Energy Transition from fossil fuels to non-fossil fuel sources.”.

The Power Minister goes on to add that the biggest Hydropower projects in Telangana, notably the Kaleswaram Lift Irrigation project and others, have benefited from massive financial support from centrally owned  financing institutions, namely PFC and REC. These two have together lent over Rs 55,000 crores for these projects.

Finally, the minister signs off on the allegation of smart metering for farmers being pushed by the centre, calling it an outright lie yet again.

While a level of tension between states and the centre is only to be expected on an issue as critical as power and energy, coming as it is at such a critical juncture of India’s energy transition, one can only hope that the politics will not impact the very real issues of environmental preservation and energy security for the future. The Electricity Amendment Bill remains stuck, thanks to issues raised by states on matters linked to autonomy, regulation, and yes, even the basic reforms on direct benefit transfer of subsidies, RPO’s  and beyond. Despite dropping key provisions, the act remains in limbo, which is a poor advertisement for reforms indeed.

Short term politicking from states has already caused immense damage to developers in some states, notably neighbour Andhra Pradesh, where PPA”s were sought to be cancelled arbitrarily. Similarly, we can see states like West Bengal with a Chief Minister opposed to almost everything from the centre lagging way behind in renewable capacity, and using some of the dirtiest thermal power in the country.

That a common sense issue such as smart metering for all consumers, so essential to track power usage and consider flexibility for the grid of the future, has to be denied by the centre is no less a pity.

Perhaps states need to take a leaf out of the Rajasthan renewable book, where the state, despite a change in government, has managed to stay the course on renewable capacity, and should see the benefits of such consistency flow soon enough.