Wind power developers in Karnataka with commissioned capacity of 270 MW are hit as the state’s energy department and electricity regulator engaged in a tiff over tariff rates. In a letter dated November 10, the state energy department asked the Karnataka Electricity Regulatory Commission (KERC) to act according to a directive dated October 27, and approve PPAs of wind power projects commissioned before March 31, 2017, at tariffs of Rs 4.50 per unit. The energy department was responding to a recent communication from the regulator which requested the state government to reconsider this directive. Through the aforementioned directive, it had invoked Section 108 of the Electricity Act, 2003, which gives the states more power to approve such power transactions.
The state department said the projects in question were commissioned before the regulator modified its wind tariffs on September 4, cutting per unit rate of wind power from Rs 4.50 to Rs 3.74. KERC had said earlier it would approve PPAs of these wind projects only if the developers agree to cut tariffs to Rs 3.74 per unit.
The state department clarified that projects of about 1,500 MW, expected to be commissioned in FY18, should be approved at Rs 3.74 per unit if the developers deposit bank guarantee of Rs 20 lakh per MW. It reminded KERC that three out of the state’s five electricity supply companies failed to meet their renewable purchase obligations in FY17.
KERC had issued an advisory to the state’s energy department in June, stating there is no need for new wind PPAs and also advised the state to follow only the competitive mechanism route to award wind energy projects.