The Ministry of New and Renewable Energy (MNRE) is exploring the possibility of offering a combination of solar and thermal power to push more solar power into the grid and bring down long-term power prices.

According to Deepak Amitabh, Chairman & Managing Director, PTC India, the move is aimed at making stressed thermal assets more viable and enhance solar power production in the country.

“Discussions are taking place under MNRE and we are all sitting with the Ministry to evolve the product. We have to involve the Central Electricity Authority, the regulators, buyers and users. So it takes two-to-three months time,” Amitabh told newspersons on the sidelines of an environment and energy conclave organised by the Bengal Chamber of Commerce and Industry here on Thursday.

The move will help release State distribution companies (Discoms) from financial pressures and the structure is likely to become more acceptable to the competitive power market, he added.

A recent study conducted by Assocham and Grant Thornton noted that the country's power sector has been one of the most stressed ones in recent times, with loans worth approximately ₹1-lakh crore having turned bad or been recast.

“As per the recent estimates, around 66,000 MW capacity is facing various degrees of financial stress, including 54,800 MW of coal-based power, 6,830 MW of gas-based power and 4,570 MW of hydropower with the lenders having an exposure of around ₹3-lakh crore to these assets, which is alarming, to say the least,” noted the study titled ‘Stressed assets in the Indian thermal power sector’.

According to Amitabh, power purchase agreements, which are usually long-term, had an element of fixed charge and variable charge. Even if the States did not draw power under a PPA, they were forced to pay the fixed charge once it was signed. This had put a lot of stress on the Discoms, for which the Centre recommended changes in the clauses of the PPA.

“When the government asked us to design a product for stressed thermal assets for the first time we designed a three-year product where there was no fixed charges. But one who signs a PPA will have to draw at least 55 per cent of the contracted amount and drawing more than that will provide the Discom an incentive,” said Amitabh.

After this change, PPAs aggregating 1,900 MW of generation that had become stressed assets were signed, of which 1,400 MW has already become operational.

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