Payment delays by distribution utilities to wind power projects in the country is posing a major threat to the feasibility of the projects. These delays are hurting liquidity of the projects and also delaying payment to lenders. Discoms in Tamil Nadu, Maharashtra, Madhya Pradesh and Rajasthan have found it difficult to pay wind power producers on time. Discoms in Maharashtra, Tamil Nadu, Madhya Pradesh and Rajasthan have delayed payments to generators of wind power by as much as 8-10 months, putting their cash flows under tremendous pressure and sending negative signals for developers and investors, which in turn can turn the tide towards development of small scale wind power projects catering to the need of specific chunk of consumers.
Some trivial and yet complex questions associate with open access mechanism which needs to addressed through a pan India study which should prove to be a path finding guide for the project developers as well buyers to felicitate the same.
Key Queries Resolved
- Which state has least regulatory barriers or least cross-subsidy surcharge (CSS) applicable to bulk buyers?
- Whether the tariff discovered in third-party power sales agreements sustainable for long-term i.e. for a period of 10-15 years?
- What are the various power procurement models which shall be most beneficial given the current regulatory paradigm and policy environment in India?
- What are the various incentives/benefits to the consumers/generators to wheel power through open access?
- Which region is most suitable for affecting the open access transactions having the largest cluster of industries, corporates and bulk consumers?
- Which region has more penetration of short term transactions through wind power?
- Which transaction i.e. bilateral or collective is preferred for wind?
Business Case For Open Access Mechanism In India
- Rising popularity among developers especially renewable players to go for third party direct agreements
- Benefits widely available to state transmission utilities and private transmission utilities to felicitate the open access mechanism through wind.
- 1500 MW of green power is sold to big corporates through direct agreements and the trend is northbound as more and more corporates are joining in the race.
- Since wind generation is erratic, the utility can source power from them as per availability and supply to consumers as per their needs 24×7.
- Reduction in tariff by a quantum of 15-20% through this mechanism with respect to distribution utilities tariff.
- States of Karnataka, Tamil Nadu, Andhra Pradesh, Telangana in southern region of India and Rajasthan, Punjab and Haryana in Northern region of the country are fast catching up with open access transactions.
- Increased impetus on rural electrification.
- Increasing number of bilateral and collective transactions of power through Open Access.