Major hurdle in flexible power generation scheme rollout removed

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Published: June 14, 2019 12:27:48 AM

The power ministry, in April 2018, had allowed thermal power generation companies (gencos) the flexibility of using renewable energy sources to meet their contractual generation obligations.

Power procured through the scheme would now qualify for meeting renewable purchase obligationsPower procured through the scheme would now qualify for meeting renewable purchase obligations

Power minister RK Singh removed a major hurdle in the implementation of the Centre’s flexible-generation scheme. Singh said on Thursday that power procured through this scheme would qualify for meeting renewable purchase obligations (RPO) even if the renewable generation units are not located near the thermal plants with which buyers have signed power purchase agreements (PPAs).

The power ministry, in April 2018, had allowed thermal power generation companies (gencos) the flexibility of using renewable energy sources to meet their contractual generation obligations. The mechanism allows thermal gencos to set up renewable power plants at their existing power stations, or anywhere else, thus allowing discoms to meet their RPOs through existing PPAs.

According to sources, state-owned electricity distribution companies (discoms) were not inclined to purchase renewable power from thermal PPAs (as per the scheme), when the supply was done from renewable plants set up elsewhere. To encourage states, Singh clarified that buying such power would help states meet their RPO obligations. The minister also directed Power System Operation Corporation (which manages the schedules and despatch of electricity) and state electricity regulators to implement the scheme without further delay.

The scheme is aimed at easing complexities faced by discoms to comply with RPO norms. Apart from facilitating the mission of having 175 gigawatt (GW) of renewable energy capacity by 2022, the move would also partly insulate thermal gencos from taking the hits stemming from the ongoing transition in the country’s energy mix.

The RPO trajectory notified by the central government mandated the states to procure 17% of their electricity from renewable energy sources in FY19. However, the actual achievement in the fiscal was 10%. The share was 8.5% in FY18. Only Andhra Pradesh, Himachal Pradesh, Karnataka and Sikkim could achieve RPO compliance in FY19.

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