Govt to offer flexibility to discoms to end long term power contracts

The Government has proposed to free both power producers and consumers from continuing with contracted obligation once the tenure of a power purchase agreement expires.

The move is expected to provide flexibility to both procurers (mainly Discoms) and generators (power projects) to look for meaning contracts post expiry of a PPA, one where discoms can get the option to buy cheaper power available in the market while generators could look at new consumers either under long term contract or through price discovery on exchanges.

The changes have been brought out by the power ministry through draft proposals on which is it seeking stakeholders comments before regulations could be finalised. The stakeholders have been asked to submit their comments suggestions by December 24, 2020.