Payment Dues of State DISCOMs Now Total ₹82 Billion to Solar, Wind, Hydro Power Producers
The payment dues are for 472 projects expected to generate 22,460.2 MW of renewable energy
Distribution companies (DISCOMs) in some of the top renewable energy generating states such as Andhra Pradesh and Tamil Nadu are the biggest defaulters in paying dues for the power procured from renewable projects such as wind, hydro and solar.
According to the Central Electricity Authority (CEA) data, 472 renewable energy generating projects spread across the states of Andhra Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Odisha, Tamil Nadu, Rajasthan, Telangana, and Uttar Pradesh, had dues totaling ₹82.3 billion (~$1.14 billion) as of July 31, 2019.
In total, these 472 projects have renewable energy generating capacity of over 22 GW.
For instance, Andhra Pradesh which tops the list of defaulters has dues totaling ₹21.11 billion (~$293 million) followed by Tamil Nadu which needs to pay a total sum of ₹18.9 billion (~$263 million).
Likewise, the Solar Energy Corporation of India Limited (SECI) has dues reaching ₹357 million (~$4.96 million) while ₹169.5 million (~$2.35 million) is the amount to be paid by the Insurance Regulatory and Development Authority (IRDA).
Last week, Mercom had reported that 376 renewable energy generating projects across the county had dues totaling ₹68.72 billion (~$960.7 million). As per the latest figures released by the CEA, 96 more projects have been marked as defaulters.
This data is crucial for the planned and phased growth of the renewable energy sector in India.
A CEA official told Mercom on the condition of anonymity that the reason for the delay in payment by some developers is because they work under the old power purchase agreements (PPA) and are not in possession of Letter of Credit which talks about the payment security.
“If the developer is working on the old PPA, then there’s no payment security mechanism. In some cases, if the developer is into a wind power project, then it can generate energy only when there’s wind. All these factors delay the payment,” he added.
When Mercom contacted SECI, a senior official maintained that there was a confusion regarding the date of payment and that three developers Parampujya Solar Energy Private Limited, Gale and Tornado Solarfarms, have recently held a discussion with SECI.
He said, “Parampujya Solar Energy has already written to the CEA to withdraw their claim and Gale, and Tornado Solarfarms will also hold a discussion with the CEA soon.”
Earlier, an NTPC official had told Mercom that if the state delays in paying on time, then the payment to generators will get adversely affected.
“Making payment data publicly available is an excellent move by the government. This not only creates transparency but also puts pressure on power procurers to meet their payment obligations because everything is out in the open now,” said Raj Prabhu, CEO of Mercom Capital Group.
In mid-August, Mercom reported that the initial data made available to the CEA showed that DISCOMs owed dues totaling ₹30.12 billion (~$420 million) to renewable energy projects aggregating 5,982 MW.
At the beginning of August 2019, Mercom reported that the CEA is planning to maintain a database of all outstanding dues by DISCOMs to renewable energy generators
In May 2019, Mercom had reported about the persistent problems being faced by renewable energy project developers due to the ongoing delays in payments.
Anjana is a news editor at Mercom India. Before joining Mercom, she held roles of senior editor, district correspondent, and sub-editor for The Times of India, Biospectrum and The Sunday Guardian. Before that, she worked at the Deccan Herald and the Asianlite as chief sub-editor and news editor. She has also contributed to The Quint, Hindustan Times, The New Indian Express, Reader’s Digest (UK edition), IndiaSe (Singapore-based magazine) and Asiaville. Anjana holds a Master’s degree in Geography from North Bengal University, and a diploma in mass communication and journalism from Guru Ghasidas University, Bhopal.