Govt allows thermal power firms to install renewable energy generation

18 Nov 2021 CW Team

In a proposal to allow the replacement of fossil fuel-based energy by renewable energy under the existing power purchase agreements (PPAs), the Centre has released revised guidelines rendering for thermal production firms to install renewable energy production capacity either by themselves via developers by open tenders and delivering it to the consumers under the existing PPAs.

The development arises in light of India’s aim of attaining 500 GW of non-fossil fuel capacity by 2030.

The Power Ministry told the media that since the value of renewable energy is lower than the cost of thermal energy, the profits from the bundling of renewable energy with thermal energy would be shared between the generator and distribution firms or other procurers on a 50:50 basis.

Since renewable energy will be balanced with thermal energy, thus, the DISCOMs would not require to obtain any separate capacity for balancing renewable energy. The distribution firms will be able to calculate the renewable energy supplied under the scheme towards their renewable purchase obligation and would be without the financial strain of separate PPA, it said.

Additionally, it said that this move by the Central government will result in a faster energy transformation and will be advantageous for both the generators and the distribution firms. The Power and New & Renewable Energy Ministry are poised to take some additional measures for attaining 500 GW by 2030, for which orders are to be released shortly.

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