Telangana not to sign power purchase agreement with NTPC; to push for renewable energy

Govt for renewable energy which is cheaper

Hyderabad: Even as Opposition parties are criticising the State government for not signing a Power Purchase Agreement (PPA) for the NTPC-Ramagundam Phase-2 (3X800MW), it is learnt that the State government has decided against signing a PPA as power supplied by the NTPC is likely to be costlier than solar power available in the open market.

This might result in Telangana losing access to 85 per cent of the power generated by the NTPC Ramagundam Phase II. The NTPC had recently written to the State government asking it to sign the PPA for NTPC Phase-2 and warned that the failure to do so may result in the allocation of NTPC Phase-2 power to other Southern States.

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According to power officials, currently the NTPC was supplying power at Rs.5.90 per unit to the State and once Phase-2 of the project was completed, the cost of power could be between Rs.8 to Rs.9 per unit, whereas the prices of solar power in the open market were Rs.2 to Rs.4 per unit. The State government, which is planning a major push for solar and similar renewable sources of power, is said to be of the opinion that if it signs a PPA with the NTPC for 25 years, it could burden consumers as they will have to pay more.

The State government is reportedly of the opinion that if it concentrates on renewable energy sources and generates power through solar, wind and hydel sources, it could get power at a cheaper price than that purchased from the NTPC.

The 4,000 MW NTPC-Ramagundam Thermal Power Plant was an assurance under the Andhra Pradesh Reorganisation Act, 2014 and the first phase (2X800MW) of the project has been completed. The balance 2,400 MW has to be completed in the second phase. As per NTPC’s assessment, the project could take five to six years to be completed.

Sources said the State government had decided against signing the PPA with NTPC as it was also planning to implement a new policy on energy generation and power purchase. The policy would be prepared while taking the State’s requirements till 2032 into consideration. The government has plans to even purchase power from private players who are ready to supply bulk power at cheaper rates, the sources added.

The government was also planning to take up solar projects on large scale, as part of which solar plants would be set up in all the 33/11 KV substations and government lands. The State government is planning to encourage individuals, institutions, government schools and college buildings, universities, commercial buildings, housing societies and self-help groups to install solar rooftops on a large scale.

The government is also studying how to generate pumped storage power for major and medium projects. Chief Minister A Revanth Reddy recently held discussions with his Himachal Pradesh counterpart Sukhvinder Singh Sukhu on setting up hydel power plants in Himachal Pradesh. Sources say the government plans to construct huge hydroelectric plants in Himachal Pradesh and use them in meeting the power demand of the State.