New Electricity Act: Power surplus TS at Adani’s mercy
New Bill empowers Centre to compel State to cut its power generation and buy the same from Adani plant
Hyderabad: From a region that was perennially in darkness just six years ago and then to emerge as a power-surplus State is no mean achievement. This is exactly where Telangana stands now, thanks to the farsighted policies and capacity addition in power generation initiated by the TRS government in a short span of time since 2014.
All these efforts may take a beating if the Centre has its way in imposing mandatory purchase of solar power at high rates from a particular company in the private sector, taking shield under the controversial new Electricity Act being pushed by the BJP government at the Centre.
Telangana utilises all the three major components of generation — thermal, hydel and solar — and it has come a long way to emerge as a power-surplus State. But it may be forced to cut down power generation, or even shut some generating stations merely to purchase solar power at a higher rate from Adani Group’s 8,000 MW project coming up at an estimated cost of Rs 45,000 crore. The State discoms will have to purchase power from the Adani plant to meet targets set by the Centre that will prove to be an additional burden for the discoms.
Shockingly, it has been reported that Adani Green Energy’s solar power project announced in June has no guaranteed customer, leading to apprehensions that State power utilities will be compelled to purchase power generated by Adani, with the legal backing of the new Electricity (Amendment) 2020 Bill introduced in Parliament on April 17.
The BJP government, in a move aimed at benefitting the Adanis, has come up with the necessary regulation to force States to purchase power from environment-friendly renewable resources like solar energy through the proposed amendment to the Electricity Act 2003. The States have to purchase the prescribed power from the sources suggested by the Centre or face penalties.
The amendment seeks to establish a national power policy to promote renewable energy, particularly solar and hydropower. The policy prescribes States to purchase a minimum percentage of energy from renewable sources. In an effort to thwart the State Electricity Regulatory Commissions (ERCs) from fixing this percentage as per the local requirements, the Centre has usurped their powers. While the TS ERC has set 7 per cent as the target for purchase of renewable power, the Centre is likely to push it to as much as 19 per cent, and even further if it so decides.
Scuttling chances of States like Telangana that can pump up Hydel power production to compensate any shortfall in thermal generation and vice versa depending on the time of the year, the Centre, which has categorised hydel power also as renewable energy, however, does not recognise any hydel power project in the State as a valid renewable energy-based power plant.
The new amendments to the Electricity Act slap penalties on States if they don’t purchase non-renewable energy from sources suggested by the Central Power Dispatch Centre in Delhi. If solar power is not purchased by Discoms, penalties — ranging from 50 paise per unit in the first year, Rs 1 per unit in the second year and Rs 2 per unit in subsequent years — will have to be paid.
Giving an instance of the imposition of a clause that States must purchase 19 per cent of power generated from renewable energy resources, TSSPDCL Chairman and Managing Director G Raghuma Reddy said that decisions of people sitting in New Delhi would have an adverse impact on States such as Telangana. “If the ERC is now formed and imposed on the State by the Centre, the decisions will be far from ground reality. The ERC should be formed by the State government with people who have an understanding of the State and its people,” he argued.
The new law is so draconian in nature that the National Load Dispatch Centre (NLDC) can ask generating companies to shut down their power generating units that have high variable production costs, meaning coal-based units. This clause will adversely affect Telangana, which provides free power to farmers and has built many mega lift irrigation projects that require cheap and sufficient power.
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