Discoms leave 16.8GW green power projects in a limbo as tariffs crash
State electricity distribution companies (discoms) are hesitating to sign contracts after large clean power projects were awarded, as they spot cheaper tariffs elsewhere, a trend that could hurt India’s image of a rules-based regime, and its future as a green economy.
Solar and wind energy projects totalling 16.8 gigawatts (GW) worth a potential investment of around ₹60,000 crore are in limbo, two people aware of the development said, as steadily falling tariffs prompt cash-strapped discoms to shop for cheaper rates.
Discoms typically sign power supply agreements (PSAs) with intermediary procurers such as state-run Solar Energy Corp. of India (SECI), which in turn sign power purchase agreements (PPAs) with project developers. States’ reluctance to sign PSAs is now leading to a further delay in signing PPAs. India’s solar power tariffs hit a record low of ₹2.36 per unit at a SECI auction in June.
