Renewable energy generation grew at 5.7% in the seven months to October 2019, falling sharply from 28.5% in the year-ago period and 25% in 2018-19, data issued by the Central Electricity Authority (CEA) said.
Government officials said curtailment of generation by states and slowdown in overall electricity demand are the key factors behind the low renewable energy generation. The growth has been around 20% per annum in the last five years. Data prior to 2014 is not available.
Besides, weak finances of state power distribution companies also impacted renewable energy generation. Industry sources said Andhra Pradesh, Telangana, Tamil Nadu and Rajasthan are some of the states curtailing renewable power even as the projects enjoy a ‘mustrun’ status. States are not letting renewable energy plants generate as they do not want to submit bank guarantees or letters of credit in favour of such plants.
Andhra has been trying to renegotiate renewable power contracts with developers and curtailment by the state is being seen by the industry as pressure tactics on developers to renegotiate or exit the power agreements. The June 28 order by the Union power ministry has mandated opening of bank guarantees by all discoms in favour of renewable firms.
Renewable energy secretary Anand Kumar said low generation was due to curtailment by states. “Some of the states have resorted to curtailment. Curtailment can be done by states only for the reason of grid security. In case they do illegal curtailment, they are supposed to pay money to the developers because they have must-run status,” Kumar said.
He said for last few months, the renewable energy sector has had headwinds, but the ministry stood by the investors and clarified that power contracts will not be renegotiated.
