No Assessment Done On The Financial Impact Of Uniform RE Tariff: Govt

Union Power Minister talked about the system recently in Parliament. Photo by-Whatwolf/Freepik

Union Minister for New and Renewable Energy RK Singh in his recent written reply given in the Parliament said that the government is yet to implement the Uniform Renewable Energy Tariff. In his response made before the Lower House, he also said that the ministry has now done any financial assessment on the likely impact of the imposition of the new tariff regime in the country. 

The minister also talked about the procedure to be followed under the new regime. He said that under this system, the intermediary procurer acts a trader, buying renewable energy from the renewable power generators as per the tariff based competitive bidding (TBCB) guidelines and selling the same to one or more distribution licensees, who in turn supply power to consumers in their area of jurisdiction and have public service obligation. “Therefore, the intermediary procurer does not have any direct public service obligation,” he said. 

“The tariff was issued by Ministry of Power on 25.10.2023, however, the actual implementation of URET is yet to be initiated. The government has not conducted any assessment regarding the impact on cost escalation resulting from the implementation of a Uniform Renewable Energy Tariff,” he said.

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The discovered tariff at which power is procured by distribution licensees to supply to the consumers is adopted by respective electricity regulatory commission, under Sec. 63 of the Electricity Act.

Earlier this year, the Ministry of Power approved the procedure for implementing a Uniform Renewable Energy Tariff for the end power procurers, including discoms and open-access consumers. It will be applicable to renewable energy projects connected with the Inter-State Transmission Systems (ISTS). 

It comes after the Electricity (Amendment) Rules 2022 discussed the uniform renewable tariff (URET). As per these rules, the implementing agency (Grid-India) is liable to compute the URT every month for each category of central pool like solar power central pool and wind power central pool, among others. 

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“The Tariff for the month shall be calculated by aggregating, for each source of RE, all the amount to be paid for the energy supplied as per the tariff (including trading margin) in the PSA and divided by the total scheduled energy of the plant/scheme qualified under this scheme,” the order said.