India Plans Web Monitoring to Make Retailers Buy Clean Energyby
Website will track status of renewable purchase obligations
Non-compliance by cash-strapped power retailers targeted
India plans to open a website to monitor whether state-owned power retailers comply with their obligations to buy renewable energy, a step toward ensuring a healthy market for clean energy amid Prime Minister Narendra Modi’s push to build 175 gigawatts of green capacity by 2022.
The compliance website is being designed by India’s electricity regulator, the Central Electricity Regulatory Commission, said a commission official who requested anonymity because he’s not authorized to speak with the media. The website will be rolled out in six to 12 months.
Financially strapped state power retailers -- the main buyers of renewable energy -- pose a growing threat to India’s clean-energy ambitions. According to government data, state-run power retailers have accumulated losses of 3.8 trillion rupees and outstanding debt of 4.3 trillion rupees ($63 billion).
Of the country’s 35 states and Union Territories, just six fulfilled mandated quotas for renewable energy for the financial year ended in March 2016, according to government data. Another eight met more than 60 percent of their obligations, while the majority fell below this mark.
The new tool is designed to promote transparency, according to the commission official. Apart from discoms, the portal will also monitor whether other bulk power consumers are meeting their green energy requirements.
India’s distribution companies, or discoms, lose money on every unit of power they sell because of transmission losses and for other reasons such as power theft, inefficient metering and billing system issues.
To improve the health of discoms by 2021, the government introduced a series of measures under a plan called Ujwal DISCOM Assurance Yojana, or UDAY, in November 2015. The program’s aim is to transfer discom debt back to the states that have signed up to UDAY. States would then issue bonds either in the market or to banks holding the debt.
Bonds worth 1.83 trillion rupees ($27.2 billion) have so far been issued for 15 states, according to government data.
In exchange, states participating in UDAY have been given targets to improve the operational performance of their distribution companies. Twenty one states have so far signed up for UDAY.
Credit rating company ICRA Ltd. said in a note in September that it expects the de-leveraging and refinancing for state-owned distribution utilities under UDAY to improve their liquidity and profitability profile in the near term.