Neither the Centre’s admonitions, nor adverse court rulings seem to be dissuading some state governments from dishonouring the power purchase agreements (PPAs) with renewable power units — a trend that is threatening to put the sunrise sector in jeopardy. Close on the heels of the Andhra Pradesh government, which virtually called for a downward revision of the tariffs mentioned in the PPAs for 5.2 giga watt of wind and solar power capacity, the Uttar Pradesh government stopped procuring electricity from 650 mega watt of wind power plants effective Tuesday evening.
The UP government’s excuse for the sudden move is the Rs 3.46-per-unit PPA tariff has not been approved by the Central Electricity Regulatory Commission (CERC). But the tariff under PPA for wind units supplying to UP is 7% lower than the average power purchase rate of the state and also much lower than the Rs 4.16-6.02-a-unit rate states paid to wind power plants under the erstwhile feed-in-tariff regime.
