Hundreds of renewable power generation projects in India over $1.1 billion owed

02/03/2022
Clean energy research house Mercom Capital India has revealed that distribution companies (DISCOMs) in some key renewable energy development regions such as Andhra Pradesh and Tamil Nadu are paying for wind, hydro and solar power. The biggest defaulter in purchasing electricity from renewable energy projects.
According to the Central Electricity Authority (CEA) across Andhra Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Odisha, Tamil Nadu The 472 renewable power generation projects in the states of Rajasthan, Telangana and Uttar Pradesh totaled $1.14 billion in arrears as of July 31, 2019.

It is reported that the cumulative installed capacity of these 472 renewable energy projects exceeds 22 GW.

Among them, the state with the most arrears is Andhra Pradesh, with a total cost of about $293 million, followed by Tamil Nadu with about $263 million.

Likewise, Solar Energy Corporation of India (SECI) owes $4.96 million, of which $2.35 million is due to the Insurance Regulatory and Development Authority (IRDA).

These data are crucial for the planned and phased growth of India's renewable energy sector.

A CEA official, speaking on condition of anonymity, revealed that some developers delayed payments because they were working under old power purchase agreements (PPAs) and did not hold letters of credit to discuss payment security.

“If the developer is working on an old PPA, then there is no payment security mechanism. In some cases, if a developer goes into a wind power project, it can only generate energy if there is wind. All these factors delay the payment ', he added.

A senior SECI official insisted that there was confusion about payment dates, and three developers, Parampujya Solar Energy Private Limited, Gale and Tornado Solarfarms, had recently held discussions with SECI.

Earlier, an NTPC official told Mercom that payments to generators would be adversely affected if the state government delayed payments.

“The public availability of payment data is an excellent move by the government. Not only does this create transparency, but it also puts pressure on power buyers to meet their payment obligations,” said Raj Prabhu, CEO of Mercom Capital.