As Delhi Metro’s Rs 41 cr power bill savings seen disappearing, DMRC rushes to Centre for help

By: and |
Updated: October 23, 2017 10:57:17 AM

Delhi Metro Rail Corporation (DMRC) had signed a power purchase agreement (PPA) on April 17 to buy 345 million units of power from Madhya Pradesh’s Rewa solar park for a 25-year levelised tariff of Rs 3.30/unit.

Delhi Metro Rail Corporation, DMRC, Madhya Pradesh, Rewa Solar parkDelhi Metro Rail Corporation (DMRC) had signed a power purchase agreement (PPA) on April 17 to buy 345 million units of power from Madhya Pradesh’s Rewa solar park for a 25-year levelised tariff of Rs 3.30/unit. (Image: Reuters)

Delhi Metro Rail Corporation (DMRC) had signed a power purchase agreement (PPA) on April 17 to buy 345 million units of power from Madhya Pradesh’s Rewa solar park for a 25-year levelised tariff of Rs 3.30/unit. Former power minister Piyush Goyal had said earlier that the deal would mean a Rs 1.20/unit savings for Delhi DMRC, which roughly translates into annual savings of Rs 41.4 crore.

However, a power ministry notification calling for about Rs 0.91/unit of inter-state transmission system (ISTS) charges has unsettled such savings estimates for DMRC. If ISTS charges are levied, the savings from electricity bill for DMRC can only come down to about Rs 10 crore. “DMRC has requested ministry of power to review the notification dated June 14, 2017, and extend the benefit of exemption of ISTS charges for solar power to DMRC also,” an official told FE. In case of power distribution companies (discoms), a category which DMRC does not currently fall into, such ISTS charges are exempted.

The power ministry did not respond to queries related to this issue. This is the second issue related to the 750 MW Rewa ultra mega solar project, which has not gone according to the original plan. There were inter-departmental disputes within the Madhya Pradesh government about a payment guarantee clause in the Rewa PPA, with the state finance ministry reluctant to agree to certain guarantee terms.

However, the guarantee was later approved by the Madhya Pradesh Cabinet. Further, a payment security fund was also created by the project’s implementing agency, Rewa Ultra Mega Solar Park (RUMS) and Ireda. The state government is also expected to pay a compensation if sufficient grid is not available for transmission of power from the project.

The flagship Rewa auctions triggered the tumbling of solar prices to below Rs 4/unit levels. The auction model had become a benchmark in the Indian solar sector. So much so that the Rewa PPA had been accepted by the central government as the standard model for all other state governments to emulate. Avaneesh Shukla, executive engineer, RUMS, told FE that developers are working on the construction of the project and it is “on track to be completed within the deadline of December, 2018”.

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