India's Renewable Energy Sector Advocates for State-Specific Bids and Direct Consumer Benefits
India's renewable energy industry calls for state-specific bids
Business Standard
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The renewable energy industry in India is urging for state-specific bids to expand generation beyond the current five states, which contribute nearly 70% of capacity. Industry leaders propose direct benefit transfers to consumers instead of subsidized tariffs to alleviate losses for distribution companies.
- 01Renewable energy generation needs to diversify beyond five states that currently dominate capacity.
- 02Direct benefit transfers to consumers could replace subsidized electricity tariffs.
- 03Inter-state transmission system charges encourage developers to focus on high-potential states.
- 04Smart meters could help reduce the gap between average cost of supply and average revenue realized.
- 05Confidence in government agencies has decreased, leading to fewer bids being floated.
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At the Confederation of Indian Industry (CII) Annual Business Summit, leaders from India's renewable energy sector called for state-specific renewable energy bids to broaden generation capabilities beyond the five states that currently account for nearly 70% of the country's capacity. Rajiv Ranjan Mishra, managing director of Apraava Energy, emphasized that renewable generation and transmission should be a nationwide initiative to avoid prolonged transmission delays. He criticized the current system, where inter-state transmission system (ISTS) charges lead developers to favor states with high solar and wind potential, thus straining local infrastructure. Mishra proposed direct benefit transfers to consumers, similar to the LPG subsidy model, to reduce losses for distribution companies (discoms). Parag Sharma, CEO of Resolven and president of the Wind Independent Power Producers Association (WIPPA), supported localized bidding and highlighted the need for waiving ISTS charges for 42 GW of unsigned power purchase agreements (PPAs). Despite significant bids issued in previous years, the confidence of the Ministry of New and Renewable Energy appears to be waning, with only 20 GW of bids planned for 2025 due to concerns over past PPAs.
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The push for state-specific bids and direct consumer benefits could lead to more efficient energy distribution and lower costs for consumers, potentially reducing electricity bills.
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