Buying power from exchange not a long term solution:DERC chief

Buying cheaper electricity from power exchange is not a long term solution for Delhi and power purchase agreement with the generators cannot be wished away, Delhi Electricity Regulatory Commission (DERC) Chairman P D Sudhakar said today.
Elaborating on the power status of Delhi, Sudhakar said it "is wrong to carry this impression that we can have day to day purchase of power on short notice from power exchange" to meet Delhi's heavy demands.
"We have long term power purchase agreement with the generators to the extent of 6,000 MW which is peak demand during the summers. The rates in power exchange are quite low which is around Rs 2," Sudhakar said.

"It raises common curiosity in mind of anybody that why purchase it under long term power purchase agreement at Rs 4-5 when power is available at Rs 2-3 at power exchange. In power exchange there is no guarantee that we will get power of this volume of 4,000 MW or 2,000 MW.
"It may happen occasionally that you may not be able to procure what you need especially in summers. So we cannot do away with power purchase agreement," Sudhakar said at a conference on 'Affordable 24x7 Power to All @2019,' organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

His statement came after Delhi government has proposed to the central government to surrender 2,255 MW electricity it buys at a high rate from Central Public Sector Undertakings (CPSUs).
Sudhakar said that power is cheap in power exchange because the distribution companies are not financially sound and they are not purchasing power from the generator in spite of there being demand for it and resorting to power cut.
"This impacts the generators also. Failing to sell power to distribution companies they come to power exchange and they are sort of making distress help which is not sustainable situation. This also affects financial help of generator," Sudhakar said.