Renewable energy procurement
Source: By Karunjit Singh: The Indian Express
Union power minister RK Singh on 15 February 2022 dismissed statements by Telangana Chief Minister K. Chandrashekar Rao that the Centre was “pushing” states to buy solar power from certain developers.
What is the controversy about?
Telangana Chief Minister Rao said: “The Prime Minister of this country is lying. He is claiming that electricity will be provided cheaply, but what is actually happening is he is asking states to purchase solar power produced by companies which give funds to his party.” Solar power bids are conducted by the Solar Energy Corporation of India (SECI) and states procure solar power based as per their needs.
The Union power minister responded to the charge. “It is a lie,” Singh said, according to a statement by the Ministry of New and Renewable Energy (MNRE), noting that states were free to hold their own bids and buy green energy from any developer instead of procuring power based on bids by the SECI.
“They can choose to have their own bids. Therefore, the statement by the chief minister was totally false,” the MNRE said quoting the minister in a release
What are Telangana’s other concerns regarding renewable energy procurement?
Telangana has been particularly vocal about the “increasing burden” forced upon states by the Centre on account of the clean energy cess imposed on coal and the RPOs (Renewable Purchase Obligation). Under RPO, power distribution companies purchase a certain percentage of their requirements from renewable energy sources.
The state has also found that the increase in the clean energy cess from Rs 50 to Rs 400 per tonne on coal which was in 2017 subsumed under the GST compensation cess had over the past seven year cost the state an additional Rs 7,000 crore. The state has also raised the issue of mandatory purchase of renewables reducing the Plant Load Factor (PLF) for existing thermal power projects of the Telangana State Power Generation Corporation.
Renewable purchase obligations set targets for states for both solar and non-solar energy procurement as part of their RPO. Rao questioned the mandate to procure a certain percentage of power from solar energy noting that Telangana had hydro power projects producing over 2,500 MW of power from rivers.
“We produce over 2,500 MW power from these projects. Are we supposed to stop these projects and purchase solar power just because PM Modi wants it?” Rao said.
The Centre has responded noting that RPOs are “a part of an international commitment made by the countries to carry out energy transition from fossil fuels to non-fossil fuel sources.”
States have thus far not been able to meet RPO targets, with over a dozen states and UTs achieving less than 60% of RPOs. Power minister RK Singh has previously noted that current penalties for noncompliance with RPOs are negligible and that the Centre has proposed to increase penalties on states for non-compliance with RPOs in the draft electricity amendment bill.
