New Delhi: State-run Solar Energy Corporation of India (SECI) has signed Power Supply Agreements (PSAs) for about 14 GW so far and is optimistic about ending the financial year with five times more PSAs than the last year, said Managing Director Suman Sharma on Thursday. Speaking at the ET Energy Solar Power Congress, Sharma also said that with COVID-19-induced disruptions easing, the pace of renewable energy (RE) capacity addition is expected to go up manifold in comparison to the last two years.
"This year, till date, SECI has been able to secure more than 14 GW of PSAs and we are sure that by the end of the year, we would have more than five times the PSAs signed in the last year. And that is despite COVID continuing in this year as well," said Sharma.
The statement assumes significance because the COVID-19 pandemic has adversely affected the signing of PSAs over the course of the last two years. A report by Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research for April 2021 had said that PSAs for nearly 19 GW of RE capacity tendered by SECI were yet to be signed by state-owned distribution companies (discoms). "Delays in signing power sale agreements (PSAs) are a bottleneck in the growth of renewable energy capacity in India, jeopardising the government's renewable energy target of 175 gigawatts (GW) by 2022, dampening investor confidence and threatening the viability of projects," the report had said.
While SECI has not disclosed the PSAs signed in FY21, a growth of five times over last year's figures is a certainly a significant development. After selecting bidders for a tender floated by it, SECI signs 25-year Power Purchase Agreements (PPAs) to procure power from the projects awarded by it. The PSU then signs 25-year PSAs with discoms for the sale of procured power to them.
While acknowledging that the financial stress in the power distribution sector is a major impediment that needs to be addressed for RE capacity addition, the SECI MD said that both the PSU and the Central government are working on policy initiatives and schemes to address discoms' concerns. "An area of concern for discoms is power tariff. Because of the drastic reduction in RE tariffs, some discoms faced the first mover's disadvantage. In order to address that, the ministry is coming up with One Nation, One Tariff soon. There's no need to wait for the lower tariff tender in future. One Nation, One Tariff will bring about a much-needed reform in the power sector," Sharma said.
(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)