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Power Ministry eases norms of flexible generation scheme

Power Ministry eases norms of flexible generation scheme

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The Power Ministry, in April last year, had allowed thermal power generation companies (gencos) the flexibility of using renewable energy sources to meet their contractual generation obligations.

Union Power Minister R K Singh removed a major hurdle in the implementation of the government’s flexible generation scheme, as he stated on Thursday that power procured through this scheme would qualify for meeting renewable purchase obligations (RPO), even if the renewable generation units are not located near the thermal plants with which buyers have signed power purchase agreements (PPAs).

The Power Ministry, in April last year, had allowed thermal power generation companies (gencos) the flexibility of using renewable energy sources to meet their contractual generation obligations.

This mechanism allows thermal gencos to set up renewable power plants at their existing power stations, or anywhere else, thereby allowing power distribution companies (discoms) to meet their RPOs through existing PPAs.

The flexible generation scheme is aimed at easing complexities faced by discoms to comply with RPO norms.

Apart from facilitating the mission of having 175 gigawatt (GW) of renewable energy capacity by 2022, the move would also partly insulate thermal gencos from taking the hits stemming from the ongoing transition in the country’s energy mix.

The RPO trajectory notified by the central government mandated the states to procure 17 per cent of their electricity from renewable energy sources in FY19.

However, actual achievement in FY19 was 10 per cent, as against 8.5 per cent in FY18. Only Andhra Pradesh, Himachal Pradesh, Karnataka and Sikkim achieved RPO compliance in FY19.—FE

Source: ENS
Anand Gupta Editor - EQ Int'l Media Network