A recent report by Central Electricity Authority (CEA) states that renewable energy procurers, mainly state-owned distribution companies, owe over Rs.8,200 crore to power producers in the renewable energy space—solar, wind, small hydropower, etc. As of July 31, 2019, outstanding dues amounted to Rs.8,231 crore, the report states.
Andhra Pradesh owed Rs.2,111 crore to RE generators, representing over 25 per cent of the total outstanding dues, as of July 31, 2019. Tamil Nadu and Telangana followed with shares of 23 per cent and 19 per cent, respectively. Thus, the top three states—also the largest generators of renewable energy—accounted for two-thirds of the total dues, as of given date.
In some cases, renewable energy generators have receivables from NTPC because even through the power purchase agreement (PPA) has been entered into between NTPC and power generators, NTPC, in turn, has inked power sale agreements (PSA) with discoms. As discoms have delayed payments to NTPC, the Central utility is unable to pay power generators on time.
The issue of non-payment by discoms has gained much prominence in recent times. The power ministry has taken a few measures to mitigate cases of delayed payments. As discussed in an earlier post on www.indiapowerfactor.in, effective August 1, 2019, power distribution companies will need to open sufficient letters of credit with banks so that payment to power generators is not delayed. The new guidelines promise to be strict with erring power discoms. Consequences of non-creation of letters of credit can be very severe, including stopping of dispatch from power generators, stopping of short-term Open Access and barring from accessing power exchanges. Industry experts believe that if discoms faithfully adhere to these norms, the generator-discom payment cycle can get positive, resulting in lesser instances of load shedding.
On its part, CEA is also trying to properly monitor amounts payable by discoms to renewable energy generators. In early August 2019, CEA asked RE generators to provide details of such dues, on a monthly basis.
They have also been asked to submit their contact details so they can have access to PRAAPTI portal. PRAAPTI stands for Payment Ratification and Analysis in Power Procurement for bringing Transparency in Invoicing of generators. Launched in May last year, PRAAPTI is an online platform aimed at enhancing transparency and encouraging best practices in power purchase transactions. Updates on PRAAPTI take place every month; currently, data is available of May-end 2019.
Also read: Discoms owe over Rs.8,200 crore to RE generators
Latest data on PRAAPTI shows that 58 discoms had total outstanding dues of Rs.45,344 crore to power generators (both conventional and renewable). Out of this amount, Rs.26,989 crore (or 60 per cent of the total) was overdue.
(The author of this article, Venugopal Pillai, is Editor, T&D India, may be reached on venugopal.pillai@tndindia.com. The views expressed here are personal.)