A newsreport from Down to Earth notes how renewable energy is facing a serious block in the nation. Odisha government has asked the Centre for a subsidy to purchase solar power, saying it is too costly. Cash-strapped discoms mean a rise in cases of delayed payment to renewable energy developers and can have serious implications for the progress of the sector in the country.
Odisha is developing a 25 MW solar photovoltaic plant under its state policy. The company which won the bid did so by quoting the lowest ever tariff of Rs 7 per unit in February. But the state is reluctant to buy solar energy even at this price.
In Tamil Nadu the state electricity board has not made any payment to the state-based wind developers for a year. The pending amount is around Rs 1,500 crore to wind developers and Rs 5,000 crore to developers of conventional power.
The renewable energy certificate mechanism promotes the sale of electricity from renewable sources to discoms at the prevailing conventional energy tariffs. While the amount is lesser than feed-in tariff, the remaining balance is recovered by selling the environmental attribute of generating this clean electricity in the form of renewable energy certificates (REC). One REC is equal to one unit of electricity which has a floor price of Rs 2,900 per unit in the market.
The purchase of RECs helps a state fulfil its Renewable Purchase Obligation (RPO). It is the target set by state governments for discoms to purchase a certain amount of electricity from renewable power producers. To meet this obligation, the state discom has to either purchase electricity from renewable developers or buy equivalent RECs.
But how can discoms buy when they are cash-strapped? Is it time to review RPOs? Or should the clean energy fund be used? As one observer said conventional power is not really cheap, especially when states under crisis buy power. So is it time to take on the challenge?
Odisha is developing a 25 MW solar photovoltaic plant under its state policy. The company which won the bid did so by quoting the lowest ever tariff of Rs 7 per unit in February. But the state is reluctant to buy solar energy even at this price.
In Tamil Nadu the state electricity board has not made any payment to the state-based wind developers for a year. The pending amount is around Rs 1,500 crore to wind developers and Rs 5,000 crore to developers of conventional power.
The renewable energy certificate mechanism promotes the sale of electricity from renewable sources to discoms at the prevailing conventional energy tariffs. While the amount is lesser than feed-in tariff, the remaining balance is recovered by selling the environmental attribute of generating this clean electricity in the form of renewable energy certificates (REC). One REC is equal to one unit of electricity which has a floor price of Rs 2,900 per unit in the market.
The purchase of RECs helps a state fulfil its Renewable Purchase Obligation (RPO). It is the target set by state governments for discoms to purchase a certain amount of electricity from renewable power producers. To meet this obligation, the state discom has to either purchase electricity from renewable developers or buy equivalent RECs.
But how can discoms buy when they are cash-strapped? Is it time to review RPOs? Or should the clean energy fund be used? As one observer said conventional power is not really cheap, especially when states under crisis buy power. So is it time to take on the challenge?
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