Govt mandates renewables mix in output of generation companies
New Delhi: To reduce the country’s coal demand and to make electricity prices cheaper or more attractive for distribution companies (discoms), Union power minister RK Singh on Thursday said the government will make bundling of conventional electricity with renewable energy mandatory for all generation companies in the country, including private ones
New Delhi: To reduce the country’s coal demand and to make electricity prices cheaper or more attractive for distribution companies (discoms), Union power minister RK Singh on Thursday said the government will make bundling of conventional electricity with renewable energy mandatory for all generation companies in the country, including private ones.
To aid this, he said another proposal is in the works under which, all power projects, including the captive ones, will be mandated to set up renewable projects at their existing locations
“Going forward, India’s power demand is going to be 200 GW+. One of the ways we are trying to make procurement of power more attractive for buyers (discoms) is through bundling. Until now, we had the provision of bundling in tariff policies, but it was not operationalised. Now, we have decided to make bundling mandatory for all generation companies. We will make it mandatory for all gencos to arrange for renewable (energy) as per the capacity of the thermal power station. What will happen is that the requirement of coal will come down by about 25-30% and price of power will reduce because renewable energy is cheaper,” Singh told reporters on Thursday.
He further said that large industries with coal-based captive power plants will be mandated to set up captive renewable projects, which they can blend and use. “These plans will also carry forward in our goal to have 500GW of non-fossil power generation by 2030 out of a total generation of 817 GW,” Singh said.
The minister also said the government will issue an order to the Central Electricity Regulatory Commission (CERC) to lower the sealing prices of the day-ahead market and real term market from the current ₹12 per unit.
Singh said the decision was taken because several power discoms were unwilling to buy power from the exchange and were resorting to load-shedding and also because the ministry found that power companies are “profiteering by evading the exchange” and working through direct negotiations.
The government will invoke section 107 of the Electricity Act to issue the directive to the CERC. This will be the second time in a month that it will issue such a direction as the first directive on capping the prices of day-ahead market and real term market was issued on March 26. That time it had reduced the cap from ₹20 per unit to ₹12 per unit, which is applicable across all segments of power exchanges.