Govt. Plans to Setup UMPPs like Mega RE Projects

The government has announced that it is planning large renewable energy projects like the coal-based ultra-mega power project (UMPPs) through the public- private partnership means.

The renewable power projects may comprise any renewable source of generation or a combination of them. The plants are expected to be 1,800 MW in capacity, which can be spread over three areas of 600 MW each, and the power purchase agreements (PPAs) will be for 25 years, a senior government official believed.

Industry insiders, nonetheless, are cynical about the idea of such ultra-mega renewable power projects as recent auctions of solar power contracts received lukewarm response. A tender by the Solar Energy Corporation of India (SECI) for 1,200 MW solar power purchase established bids from SoftBank-backed SB Energy and Chennai-based GRT Jewellers.

Though SECI guarantees payments, the tariff ceiling is fixed at Rs 2.65 per unit. An NTPC tender for 1200 MW, too, received poor response, forcing the company to extend the deadline.

The power tariff renegotiation bid by Andhra Pradesh has left investors nervous about taking up the otherwise lucrative projects.

The government is planning to allocate the responsibility of site identification to all central public sector undertakings (CPSUs) in the energy space, including NTPC Ltd, SECI, Power Finance Corp and NHPC Ltd. Each CPSU may be given charge of two-three states. They will float joint ventures with the state governments and set up special purpose vehicles (SPVs).

The states will help the SPVs secure land and regulatory clearances. The Centre is working on two-three models for sharing of profit between the CPSUs and the states. The states will receive 2 paise per unit for 25 years as yearly income on generation

The actual installations on these sites will be done by private developers to be selected by the SPVs through tariff-based competitive bidding.

A major relief to the renewable projects would be that the connecting power transmission line will be treated as national asset, relieving it from any pangs in clearances.

Solar PV | News published on 13/08/2019 by Moulin

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