Bihar Counts On Lower Renewable Energy To Surrender 854 MW Thermal Power Allocation

In an interesting move, the Bihar State Power Holding Company Limited (BSPHCL) has chosen to surrender 854 MW of the state’s central allocation of thermal power. In doing this, the state firm is counting on both its right to exit PPA’s that are over 25 years old, and the possibility of cheaper renewable energy to make up for the surrendered allocation.

In a notice to NTPC, the state entity has followed due practice of six months notice, asking for a pause on supply of the 854 MW of power from NTPC’s thermal plants in Kahalgaon and Farakka. While Kahalgaon started power generation in 1992, Farakka actually started way back in 1986.

Bihar has an allocation of 351.6 MW from Kahalgaon and 502.4 MW from Farakka.

The decision to exit was also prompted by the impending start of supplies from the much delayed Barh thermal power plant of NTPC, besides North Karanpura thermal plant in Jharkhand, where the state has also entered into fresh PPAs.

With an expected purchase cost of renewable energy between Rs 2.60 to Rs 3.15 the costs are much lower than the average rate of over Rs 4.15 from the old thermal plants.

While the BIhar move is a pointer to the future as many other states with old PPAs seek exits in the face of lower renewable energy costs, the state is far from making serious progress on its renewable journey. It needs to ramp up its own renewable energy generation, especially solar, where it has been a serious laggard thus far. Over 93% of the state’s power generation capacity of 7554 MW comes from Coal, with the rest (554 MW) coming from Hydro and some renewables. Progress has been tardy on utility scale as well as rooftop solar, with the government failing to take advantage of even the PM KUSUM scheme.

Future plans to achieve its 40% share of renewable target by 2030 seem to be built around signing PPA’s for projects in other states, besides buying from power exchanges.