MNRE Issues Advisory Asking States to Honor Wind PPAs

August 22, 2017


Bringing relief to wind project developers across India, the Ministry of New and Renewable Energy (MNRE) has issued an advisory to state governments and state electricity regulatory commissions (SERCs) asking them to honor wind power purchase agreements (PPAs) for projects commissioned before March 31, 2017.

“Many SERCs are not providing consent for evacuation from wind power projects that were commissioned before March 31, 2017, due to cost issues. After the first wind auction – wind tariffs have fallen drastically and some SERCs are not happy with the old prices,” stated an MNRE official.

The MNRE official also said that this has led to completed wind projects just sitting idle and facing losses which is not a good situation to further India’s target of 60 GW of wind by 2022.

The MNRE has said, “Denial of consent from SERCs has created an atmosphere of uncertainty in wind power sector.”

In a meeting chaired by Dr. Arvind Panagariya, Vice Chairman, NITI Aayog, everyone agreed that “state governments should not go back on contractual agreements.”

The MNRE has asked affected wind project developers to take up the matter with SERCs. The MNRE further commented that  if it becomes necessary, the state governments can issue directions to SERCs under Section 108 of the Electricity Act of 2003, to provide consent.

Another MNRE official related to the wind sector said, “You have to protect consumers (low prices are good for consumers), but at the same time you have to uphold the law. We can’t work in retrospect, progress should be onwards.”

Wind tariff of ₹3.46 (~$0.051)/kWh was discovered in India in its first competitive auction.

Saumy Prateek Saumy is a senior staff reporter with covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.