Power Sector PSU’s Get Strong Backing To Push For Renewables

Yesterday, (September 8) at a meeting to discuss the action plan for enhancing the investment by power sector CPSEs (Central Public Sector Undertakings) in renewable energy projects under the Chairmanship of R.K Singh, Union Minister of Power & NRE yesterday representative of all Hydro CPSEs, NTPC Ltd., MNRE and SECI came in. Key decisions were taken to enable investments by these firms into the renewable energy sector.  Most CPSE’s have declared ambitious plans for adding renewable energy to their portfolio. We had earlier covered the top 5 and their plans.

Investment approval & Competitiveness:

In-principle approval to be accorded to CPSUs of MoP for bidding of RE power projects at the beginning of year for a pre-determined capacity based on strength of their balance sheet.

Policy and Regulatory issues:

Bundling of RE projects with New or untied/high tariff hydro projects to be allowed so as to bring down the tariff of hydro power to consumers.

Interventions – MNRE related issues

Allocation under CPSU Scheme:  It was deliberated to allocate the offered capacity amongst CPSUs through bidding process in some form on equitable basis.

Issues with State Govt.

MNRE to evolve mechanism to ensure sanctity of bidding process and PPA by the State Government and for rationalizing high Solar Park charges.

The move signals yet again the intent, and pressure the government is placing on its controlled entities to ensure momentum on the renewable energy front is sustained. We have written on this earlier at SaurEnergy, on how central PSU’s are increasingly expected to carry their share of the load  in India’s overall renewable energy targets. So far, the private sector has played a stellar role in building capacity. But as we have seen in recent years, the security of  central PSU at the other end is far better for most developers as compared to even state government discoms, making the case for higher PSU involvement.

In fact, PSU’s like Coal India Limited have even made a move into manufacturing for the solar supply chain, moves that will be watched with high interest in coming months.