MNRE enforces fixed charges payable to clean energy firms also

MUMBAI: The ministry of new and renewable energy has now decided to extend fixed charges payable by power distribution companies (discoms) for the consumption of power generated from solar, wind and small hydro projects as well. In a memorandum issued on Wednesday, the ministry has said that if power dispatch to discoms is discontinued if the discom has failed to pay its dues to the generator, the fixed charges will continue to accrue during the non-dispatch period.

On 28 June, the ministry of Power directed all discoms to open and maintain sufficient letters of credit (LCs) as payment security under power purchase agreements (PPAs) with generation companies. The rule comes into effect in August. The government took this measure as discoms’ dues to generators have mounted, placing the latter and their lenders under stress.