R K Singh Pushes For Clean Energy in Meeting With Gencos

R K Singh recently held a meeting to address implementation issues regarding thermal power stations to reduce emissions and made a case for clean energy.

Re-elected Power and New and Renewable Energy Minister, R K Singh, recently held a meeting to address implementation issues regarding the mechanism for providing flexibility in generation and scheduling of thermal power stations to reduce emissions and push for clean energy.

The mechanism allows power generators to increase the share of renewables in their overall energy mix for meeting their committed power supplies to their consumers or utilities.

“Power Minister has given appropriate directions to resolve such issues,” a Ministry statement said. He discussed the implementation issues regarding the mechanism for providing flexibility in generation and scheduling of thermal power stations to reduce emissions.

The meeting was attended by senior officials from the two ministries, Central Electricity Authority, Central Electricity Regulatory Commission, POSOCO (Power System Operation Corporation Ltd) and state-run power giant NTPC Ltd. During the meeting, Singh said that the focus of the government is on the growth of renewable energy in the country.

Highlighting India’s commitments at international fora, the minister said that all necessary policy support should be provided for encouraging renewable energy capacity addition leading to energy security and environmental protection.

The mechanism of allowing flexibility in generation and scheduling of thermal power stations was issued by the power ministry. Under the mechanism, a generating company may establish or procure renewable energy generating capacity anywhere in the country and utilise such renewable capacities for supplying the power against existing commitments.

Recently, In the meeting chaired by R K Singh, it was decided that MNRE would follow up with RBI for removal of the priority sector lending limit for the RE sector. This will encourage the Public Sector Banks to lend more for RE projects and help RE developers access easy to finance.

These issues came up for discussion during a review meeting by Singh with the industry players, banks and financial institutions and finance ministry officials. In the meeting, RK Singh also asked the Banks/Financial Institutes to categorise RE as separate sector different from power sector so that funds would flow to RE projects and also requested banks to come forward to lend to RE sector.

India’s thermal power sector has been in a vexed financial situation for some time, plagued by issues ranging from fuel availability, cost of imported fuel, litigation with financial creditors and of course, the pressure from renewables now. With cost of renewables coming down all the time, the pressure is likely to intensify, with the sector already operating at historically low PLF (plant load factors) of around 60%.  For the power minister, and India per se, managing the transition to renewables has been made doubly difficult by the poor financials of the thermal power sector, and the massive amounts of funds tied up with them, both productive and non-productive. well over 25 GW of thermal and gas fired capacity is lying unused right now, due to poor planning and unviable fuel costs. Ironically, it is these stranded assets that are also preventing fresh  capacity to come up fast enough to meet the country’s immediate predicted needs, allowing renewable energy capacity addition to overtake thermal from 2018 onwards.

The best hope for the sector would seem to be accelerated retirement of older plants, a better policy on gas pricing, and of course, a cure for the financial disease of the state discoms, the majority of whom are still losing money, affecting all players in the eco-system.