NTPC's Initiative for Unsold Renewable Energy Projects
National Thermal Power Corporation (NTPC) Limited, India’s largest power generator and a key renewable energy implementation agency (REIA), has initiated a strategy to purchase electricity from renewable energy (RE) projects that have not found buyers. These projects were tendered by NTPC but failed to secure power purchase agreements (PPAs) with any state.
Background and Context
- NTPC, along with Solar Energy Corporation of India (SECI), National Hydroelectric Power Corporation (NHPC), and Satluj Jal Vidyut Nigam (SJVN), is designated as an REIA by the Ministry of New and Renewable Energy (MNRE).
- Over the last two years, NTPC tendered 25 GW of RE capacity, of which 15 GW remains unsold due to states' reluctance to sign PPAs.
NTPC's Strategy
- NTPC proposes to buy power at a standard rate of ₹2.8 per unit from these unsold projects.
- Plans to sell this power in the merchant market or to the commercial and industrial (C&I) segment, where demand for green power is increasing.
- NTPC aims to blend this RE with energy storage solutions to provide peaking power during high demand periods.
Challenges and Observations
- NTPC would forgo the trading margin of ₹0.07 per unit usually earned through PPAs.
- In total, 40 GW of RE projects tendered by REIAs are pending buyers, with SECI and NTPC having the largest share of unsold projects.
- The Central Electricity Regulatory Commission (CERC) rejected tariffs for grid-scale battery energy storage system (BESS) due to delays in signing PSAs and PPA and falling prices in BESS.
Controversies and Legal Challenges
- Delay in signing agreements has led to legal challenges, with JSW Energy contesting the CERC's tariff rejection in court.
- The Adani Group is involved in a US investigation over an alleged $250 million bribery case related to solar projects.
Key Statistics
- 15 GW of RE capacity from NTPC tendered recently remains unsold.
- A total of 40 GW of RE projects from all REIAs await buyers.
- Purchase rate for unsold RE power is set at ₹2.8 per unit.
