Discoms can now exit from PPAs after completion of tenure

09 Jul 2021 CW Team

The Ministry issued a draft proposal in December 2020, allowing discoms to continue or exit PPAs after completing their tenure. It would give flexibility to the central generators to sell power in any mode after the discoms leave.

It is also significant for the discoms as they can terminate old PPAs tied up with uneconomical power tariffs. It is also a step towards closing older thermal power plants with higher rates of pollution.

MoP said in a letter to all the power departments of the states and union territories that discoms are allowed to renounce the entire allocated power from projects that have completed 25 years of commissioning. However, discoms are not allowed to relinquish a share of the unallocated power pool.

To exit PPAs, discoms should give a notice of six months before relinquishing power. Their request of relinquishment will only be considered after discoms clear all their dues. Once exit from the PPAs, shares from the central generating stations shall not be taken back by the discoms under the same PPA.

The Ministry also allows discoms to continue to procure power from projects after completing 25 years of operations as the right to procure available power under the Electricity Act, 2003.

According to the letter, the central power generating stations will be allowed to sell the relinquished power in the open market through power exchanges, including real-time markets and term-ahead markets. The power generating stations can collaborate with the buyer through PPAs signed for the long-term, medium-term, and short-term.

In a report by MoP, India's power sector is in a transitional phase, shifting from long-term power generating contracts to short-term contracts and electricity spot markets.

Image Source

Also read: Rajasthan energy department to exit five PPAs signed with NTPC

The Ministry of Power (MoP) has allowed the distribution companies (discoms) to continue or leave from their Power Purchase Agreements (PPAs) for projects that have completed 25 years or specific tenure in the PPA with the central power generating stations. The Ministry issued a draft proposal in December 2020, allowing discoms to continue or exit PPAs after completing their tenure. It would give flexibility to the central generators to sell power in any mode after the discoms leave. It is also significant for the discoms as they can terminate old PPAs tied up with uneconomical power tariffs. It is also a step towards closing older thermal power plants with higher rates of pollution. MoP said in a letter to all the power departments of the states and union territories that discoms are allowed to renounce the entire allocated power from projects that have completed 25 years of commissioning. However, discoms are not allowed to relinquish a share of the unallocated power pool. To exit PPAs, discoms should give a notice of six months before relinquishing power. Their request of relinquishment will only be considered after discoms clear all their dues. Once exit from the PPAs, shares from the central generating stations shall not be taken back by the discoms under the same PPA. The Ministry also allows discoms to continue to procure power from projects after completing 25 years of operations as the right to procure available power under the Electricity Act, 2003. According to the letter, the central power generating stations will be allowed to sell the relinquished power in the open market through power exchanges, including real-time markets and term-ahead markets. The power generating stations can collaborate with the buyer through PPAs signed for the long-term, medium-term, and short-term. In a report by MoP, India's power sector is in a transitional phase, shifting from long-term power generating contracts to short-term contracts and electricity spot markets. Image Source Also read: Rajasthan energy department to exit five PPAs signed with NTPC

Real Estate

07 Jul 2026

Pecan Realty Completes Rs 1.5 Billion Transactions

Pecan Realty has recently completed four institutional transactions worth over Rs 1.5 billion over the past two years, strengthening its position as an execution-led real estate platform. The deals include resolution-led acquisitions, structured finance transactions and capital partnerships across its development portfolio.The transactions covered acquisitions through the National Company Law Tribunal process and helped provide repayment or exits to both private and public sector lenders. The company said the deals demonstrate its ability to resolve complex project situations, work with instit..

Real Estate

07 Jul 2026

SNN Estates Expands North Bengaluru Housing Project

SNN Estates has announced an expansion of its SNN Estates Felicity residential project in North Bengaluru following strong buyer demand, with 75 per cent of the first-phase inventory sold within three days of launch.The developer will add 76 apartments in the new phase, taking the project's estimated revenue potential to around Rs 1,000 crore upon completion of Phase 2.Spread across 6.5 acres in Rachenahalli, near Manyata Tech Park, the project comprises 604 apartments in 1.5, 2, 2.5, 3 and 4 BHK configurations. The development includes a 50,000-sq-ft clubhouse with amenities such as sports co..

Infrastructure Urban

07 Jul 2026

SCG Drives ASEAN Industrial Transformation Strategy

SCG is strengthening its focus on ASEAN as a key growth region by advancing industrial transformation, enhancing competitiveness and building resilient regional value chains. Thammasak Sethaudom, President and Chief Executive Officer, SCG, highlighted the need for industries to continuously develop capabilities, strengthen resilience and deepen regional cooperation to achieve sustainable long-term growth.SCG views ASEAN as an important growth engine alongside China, supported by favourable demographics, trade connectivity and investment flows. With ASEAN’s GDP projected to grow by around 4.7..