State govts asked to issue advisories to SERCs to adopt tariff arrived through competitive bidding

Twesh Mishra New Delhi | Updated on June 12, 2019 Published on June 12, 2019

Delay in tariff adoption hampers viability of renewable energy projects: officials

The Ministry of New and Renewable Energy has asked State governments to write to State Electricity Regulatory Commissions (SERCs), asking them to speed up approvals for projects bid out through competitive bids as the delay hampers viability.

Sources say that SERCs in some States were revaluating the tariff arrived after bids delaying project execution and financial closure. “This was discussed during the meeting between the Power Minister and renewable energy ministers from renewable energy-rich States. This was flagged under the issues relating to delay in adoption of tariff arrived at competitive bidding,” an official aware of the discussion told BusinessLine.

The meeting was attended by ministers and representatives from Uttar Pradesh, Tamil Nadu, Gujarat, Telangana, and Rajasthan, among others. Solar power sector representatives said there is tariff adoption delay in Maharashtra, Andhra Pradesh and Telangana, among others.

The delay in adoption of tariff by the SERC in Telangana was specifically mentioned during the meeting. “There are multiple posts lying vacant in the Telangana SERC which is delaying the tariff adoption in the state. This is because the State has been in election mode for the last 8-9 months. It was decided to fill up these posts at the earliest and approve the tariffs,” the official said.

Some SERCs have been taking inordinate time in adoption of tariff determined through transparent process of bidding. This delays the financial closure and also impacts viability of the projects, according to the official.

The delay is despite Section 63 of the Electricity Act 2003 stating that the Appropriate Commission, in this case the SERC, shall adopt the tariff that has been discovered through the bidding process. This is in accordance with the guidelines issued by the Centre.

“The States have been asked to issue an advisory to the SERCs to adopt the tariff that has been arrived through competitive bidding process within one month from the date of request,” the official said.

At present, there is 80 GW of installed renewable energy generation capacity in the country. Another 24 GW of projects are under implementation and 40 GW have been bid out. The States have also been told to speed up auctioning of renewable energy generation capacities.

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Published on June 12, 2019
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