Wind energy companies, Andhra discoms clash over discount

Bengaluru: Wind developers are up in arms against power distribution companies (discoms) in Andhra Pradesh for insisting on an arbitrary discount, appropriating a specific benefit the Centre grants renewable energy developers, verbally harping on renegotiating power purchase agreements and threatening not to pay for any excess power provided above an agreed threshold.

“They are compulsorily deducting 2% of the tariff, which is 10 paise per unit of power,” said Sunil Jain, president, Wind Independent Power Producers Association (Wippa). “The power purchase agreements (PPAs) we had signed had said that discoms were entitled to 2% discount if they made payment within a week of the power purchase. In fact, payments are made six months late, but for the last two to three months, they have begun deducting the discount anyway. The PPAs say the discoms should pay a penalty of 2% if payment is delayed beyond two months. Far from paying the penalty, they are enforcing the discount.”

The ministry of new and renewable energy (MNRE) provides a subsidy of 50 paise per unit of power produced to renewable energy developers under its generation-based incentive (GBI) scheme.

“They are deducting the entire GBI discount while making payments,” said Jain. “This is over and above the 2% discount. This has been going on for the past eight months. There was nothing in the PPA to this effect.”

He also alleged that wind developers were being verbally asked to renegotiate their PPAs at a lower tariff. “They have not put anything in writing yet, but officials keep bringing it up,” he said.