The Union power ministry has issued new guidelines providing for supplying renewable power in thermal power-bound power purchase agreements.
A government release said that under the guidance of Union Minister of Power and New & Renewable Energy, the Union power ministry and the ministry of new & renewable energy (MNRE) have issued revised guidelines providing for thermal generation companies to set up renewable energy generation capacity either by themselves through developers by open bids and supplying it to the consumers under the existing PPAs.
This will enable the replacement of fossil fuel-based energy by renewable energy under the existing PPAs.
Rationale
As the cost of renewable energy is less than that of thermal energy, the gains from the bundling of renewable energy with thermal will be shared between the generator and distribution companies/other procurers on a 50:50 basis.
As the renewable energy will be balanced with thermal energy, discoms will now not need to acquire any separate capacity for balancing of renewable energy.
Significant step
This is a very significant step towards achieving the goal of 500 GW of non-fossil fuel capacity by 2030. Distribution companies will be able to count the renewable energy supplied under the scheme towards their renewable purchase obligation (RPO) and this will be without the financial burden of separate PPA.
This step by the Central Government will lead to a faster energy transition and will be beneficial for both the generators and the distribution companies, the release said.
Also read: MERC Approves Tariff And Combined PPA Of KRC Discoms
More in store
Under the direction of the Minister of Power and New & Renewable Energy, the ministries of power and new & renewable energy are poised to take some additional steps for achieving 500 GW by 2030, for which orders are to be issued shortly.
