Discoms’ monetary well being stays a ‘crucial’ problem to RE progress in India

This places tasks susceptible to delays or cancellation.

The poor monetary well being of distribution corporations (Discoms) serves as a “crucial” problem to renewable power progress in India.

India ranked because the third market with the biggest progress in renewables, following China and the USA, as it’s forecasted so as to add some 121 gigawatts of renewable capability between 2021-2026.

India’s renewable deployment is at the moment led by photo voltaic photovoltaic (PV) with 74% and onshore wind with 16%.

“India’s forecast is revised upwards, however that is largely because of accelerating capability additions on the finish of the forecast interval following the dip in 2020, as some coverage enhancements have offset growing challenges,” the IEA Renewables 2021 report learn.

These callenges embrace the poor monetary well being of discoms which had led to delays within the signing of energy buy settlement (PPA), placing tasks susceptible to delays and cancellation. To deal with this, the federal government stepped in with help by way of extensions within the commissioning deadline for ongoing tasks in addition to grants of economic assist.

After the 2020 spherical of economic assist prolonged to discoms, the businesses’ noticed a downward pattern in overdue funds within the first quarter of 2021. Nevertheless, the overall overdue funds began to extend anew within the following quarter after the second wave of restrictions.

“Because of this, they’re suspending the finalisation of wind and photo voltaic PV PPAs whereas searching for to renegotiate downwards the contract costs already awarded in aggressive tenders,” the IEA stated.

On this mild, the federal government deliberate to grant a brand new spherical of stimulus, price US$41 b, for the following 5 years. It additionally set a brand new guideline that permits them to terminate PPAs with coal crops after 25 years.

“This can assist them cut back mounted capability funds, and allow larger flexibility in adapting to system wants and renewable power mandates,” the IEA stated.  

“This modification could have an effect on virtually a 3rd of India’s coal fleet of round 210 GW and facilitate the procurement of extra renewable power.”

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