Delhiites may save Rs 800 crore a year as BSES plans major green shift

Reliance Infra-promoted BSES, a power distribution company (discom) in Delhi, will cancel long-term power purchase agreements (PPAs) with six thermal units and replace them with renewable energy, which may lead to savings of Rs 800 crore per year for Delhi consumers, a company executive said.

This comes after the Central Electricity Regulatory Commission (CERC) allowed the discom to nix its PPA with Dadri power unit of state-owned power generator NTPC.

Senior company executives said BSES plans to end its PPA with units which are 25 years old and are costly. All the six units — Unchahar, Farakka, Auriya gas, Anta, Kahalgaon and Dadri Gas power stations — are owned by NTPC.

According to company calculations, these PPAs cost Rs 6 per unit or more to the discom and supply close to 800 Mw power to BSES. The discom has estimated that it will save Rs 800 crore by cancelling these PPAs, said an executive.

“Replacing this expensive power with substantially cheaper green power will lead to savings of around Rs 800 crore per year for Delhi consumers, which amounts to Rs 20,000 crore over 25 years,” said an executive.

Earlier this month, the CERC allowed BSES to approach the Union power ministry for de-allocating its share of electricity supply from NTPC’s Dadri-I generating station. 

The plant supplies power at an average cost of Rs 6.50/unit, making it one of the costliest power stations providing electricity to Delhi.

The CERC in its tariff regulations 2019 had allowed discoms the “first right of refusal” for procuring electricity from power plants older than 25 years. After this, BSES in November 2020 sought to stop taking power from Dadri-I generating station. 

This was approved by the CERC and later by the Delhi Electricity Regulatory Commission.