Green energy’s day-ahead trading may finish PPAs

NEW DELHI: India on Monday formally launched day-ahead trading of electricity from renewable sources in a move towards mainstreaming of green energy as the country eyes a record 450GW (gigawatts) of renewable energy capacity by 2030.
GDAM, or green energy day-ahead market, will unlock the market potential of green energy by giving project promoters more than one outlet for their output and could ultimately free them from rigid power purchase agreements (PPAs).
In that sense, GDAM is well-timed as solar tariffs, according to Crisil Ratings, are expected to rise to Rs 2.60-2.70 per unit from an all-time low of Rs 2 over the next fiscal due to increased GST on renewable energy equipment and proposed customs duty on solar modules. This could prompt utilities renege on offtake obligations under PPAs, in which case GDAM will come to the rescue of power producers.