Payment Dues to RE Firms Climbs to Rs 6872 Crore

A new report has revealed that power Discoms across the country owe close to Rs 6872 crore to RE developers in payment dues

A new report has revealed that the power distribution companies (Discoms) across the country owe close to Rs 6872 crore to renewable energy developers in payment dues up to August 16, 2019.

The Central Electricity Authority’s latest report reveals that at a time when the centre is planning ahead for achieving its ambitious 175 GW renewables target, power Discoms in Andhra Pradesh, Telangana, and Karnataka owe renewable energy firms close to 70 percent of the total amount that is due. Andhra Pradesh with its recent PPA skirmish, which now seems to have taken a fresh turn owes what is nearly 40 percent of the total dues at Rs 2,591 crore.

Andhra Pradesh houses the sixth-largest installed wind power generation capacity in the country. The state’s wind capacity at the end of 2018 stood at 4,007 Megawatts (MW) while it’s total installed electricity generation capacity stood at 23,726 MW at the end of 2018, with the wind sector’s share at 17 percent. Moreover, it also houses the fourth-highest installed solar power generation capacity in the country. The state’s solar capacity at the end of 2018 stood at 2,829 MW, accounting for 12 percent of the state’s total electricity generation capacity.

Surprisingly enough, these three states have been ranked in the top four overall in India in the newly released SARAL Index, which ranks states based on the Solar Rooftop Attractiveness.

CEA in a letter to state discoms earlier this month communicated the need to monitor payment of dues to renewable energy companies from state power distribution companies.

“It has been reported that some renewable energy generating companies are not getting payment of energy supplied to distribution companies on a regular basis. To monitor the position, CEA wants to maintain a database of all outstanding dues of renewable energy generators from distribution companies,” CEA said in a letter.

Moreover, the Power Ministry in a recent notification made it mandatory for power distribution companies to open and maintain adequate Letters of Credit as a payment security mechanism for signed power purchase agreements with power generating companies. Also, the ministry in the same notification also instructed power distribution companies to pay energy generators fixed charges as decided under power purchase agreements, in case power is not procured from these energy generators.