Govt may rebid 40 GW renewable projects stuck due to lack of purchase deals

The government is expected to go for rebidding of around 40 GW of renewable energy projects that have been stalled in the absence of power purchase agreements (PPAs), official sources said on Wednesday.

These 40 gigawatt (GW) includes both solar and wind capacity projects, one of the sources said.

"Marketing efforts are on. If it does not get any success then "we will see at some point we will close it", sources told PTI.

At present the winners of these tenders are engaged with distribution companies (discoms) because they are the potential buyers, they said, adding that no one is going to face any loss as no investment has happened yet in these projects.

 

It is only the price discovery which has happened. Tariff rate of solar projects ranges from Rs 2.38 to Rs 2.56 per unit, while for that of vanilla wind between Rs 3.70 per unit and Rs 3.90 per unit, they said.

Meanwhile, industry body FICCI said in a statement that the CERC (Central Electricity Regulatory Commission) will release final guidelines for virtual power purchase agreements soon, potentially unlocking financing for over 40 gigawatts of stranded renewable energy projects across the country.

As per the statement, S K Chatterjee, Chief of Regulatory Affairs at CERC, has said that the commission was "almost at the final stage of finalising" the framework after receiving extensive stakeholder feedback on draft guidelines released in May.

The announcement signals a breakthrough for the country's renewable energy sector, which has concerns with traditional power purchase agreements regarding delays in payment from distribution companies, FICCI said.

It said virtual PPAs allow corporate buyers to financially underwrite renewable projects without taking physical delivery of electricity, instead receiving renewable energy certificates as proof of green power procurement.

The commission conceived virtual PPAs would serve two critical purposes: enabling stakeholders to obtain green attributes for environmental, social and governance compliance without requiring traditional power purchase agreements, and supporting over 40 gigawatts of renewable energy projects.

The regulator has structured the guidelines to ensure VPPAs qualify as non-transferable specific delivery contracts rather than financial derivatives, following consultations with the Securities and Exchange Board of India, FICCI said.

The chamber said physical delivery of electricity must occur, though not directly to the corporate buyer, with the power sold into wholesale markets instead.