India's clean-energy industry opposes the revocation due to delays

Sethuraman N R & Sarita Chaganti Sing

NEW DELHI (Jan 15) - India’s renewable energy groups objected against a proposed regulatory measure that could 'deprive developers of interstate system connectivity if they fail to sign long-term power purchase agreements in a timely manner, according to letters sent to the power regulator.

The groups said that the Central Electricity Regulatory Commission (CERC)'s move would unfairly punish projects that are stalled due to reasons outside their control.

In a CERC staff document published in November, it was stated that more than 45 GW renewable capacity has grid connectivity on the basis of letters of award. However, this has not progressed into power purchase agreements and is blocking transmission bays for new projects.

The paper proposes options like auctioning capacity that has been surrendered and declaring connectivity as surrendered when PPAs are not signed for more than 12 months.

India wants to add 500 GW non-fossil power capacity by 2030. However, delays in project execution and transmission issues have been major obstacles.

Transmission network in the country -- about 495,000 circuit kilometers -- struggles to keep up with rapid growth of renewable generation.

The National Solar Energy Federation of India argued that auctioning off vacated grid connectivity at a premium will increase tariffs and favor financially stronger players. Grid access "cannot be traded."

The slow adoption of tariffs and approval processes by state distribution companies are said to be the main reasons for delays in PPA signature.

Wind-sector associations, such as the Indian Wind Turbine Manufacturers Association (IWTMA) and the Indian Wind Energy Association (IWEA), have said that the proposed 18-month deadline for completing wind projects was unrealistic.

The CERC noted that the manufacture of turbines and other equipment is slow and often imported, which adds to delays. They asked CERC to give 24-30 months instead of 18 months for projects to be completed.

Solar Energy Corporation of India, a government tendering agency, also opposes premium-based auctions. They warn that they can inflate future prices.

The SECI recommended reallocating connectivity in accordance with project readiness -- land status, financial closure, and equipment status. This would be more efficient than awarding the contract to the highest bidder.

The industry groups asked CERC to stop penalizing developers and instead focus on ensuring that contracts are signed in a timely manner by working with the renewable energy and power ministries. (Reporting and editing by Shreya Biwas; Sethuraman N.R.)

(source: Reuters)