Power distribution companies in the national Capital have finally begun to take their Renewable Purchase Obligations (RPOs) seriously. After Tata Power procured 400 MW of solar power, Reliance Infra-backed BSES on Wednesday announced its plans to procure 700 MW of ‘green energy’ for the city.
BSES, which distributes power to 70 per cent of the areas in Delhi, has decided to procure both solar and non-solar power at under Rs. 5 per unit through the “reverse auction” route to ensure an “extremely competitive” rate to benefit consumers. Claiming it to be the “largest private sector green bid in India” under guidelines of the Ministry of New and Renewable Energy (MNRE), the company said its initial procurement plan was around 700 MW.
In October 2012, the Delhi Electricity Regulatory Commission (DERC) had notified regulations that made RPO compulsory for all discoms in the city. The RPO makes it mandatory for all discoms to purchase some percentage of electricity through renewable sources of energy. Three years have passed since then, but none of the three private power utilities complied with the norm.
Consequently, the RPO to be met by the companies has spiked to 15 per cent of the total electricity procured.
Peak demand for Delhi ranges between 5,500 to 5,800 MW. Last year in May, Tata Power (TPDDL) had announced that it would procure 400 MW of solar power over three years.
The BSES, on the other hand, claims that flow of power in its “mega project” would begin as early as by the end of 2016.
According to officials, the reverse auction route for procuring power is being taken to reduce the cost by Rs. 200 crore annually. The last date for bidding for the project is January 18, while the actual flow of power is expected by the end of 2016. In a reverse auction, a bidder has to quote a rate lesser than the amount mentioned with the lowest bidder being the winner.
“This will open a new avenue of procuring power at competitive rates from renewable sources. The process is ultimately going to help consumers in getting cleaner energy at competitive rates and keep the retail tariffs low. We plan to procure clean power below Rs. 5 per unit as opposed to Rs 6.19 per unit, which was the lowest rate in an earlier bid,” said a BSES spokesperson.
The discom had floated a tender in November 2014 where the lowest bid received was at Rs 6.19 per unit and the average was at Rs 6.4 per unit.
Finding the prices expensive, BSES — which covers BYPL and BRPL — had written to the DERC last year to withdraw the earlier tender and had also requested permission to procure both solar and non-solar power (wind, hydro and waste-to-energy) through reverse auction. In an order dated December 29, the DERC allowed BSES discoms to procure renewable power through this process in line with MNRE guidelines.
“This process will enable BSES discoms to honour their RPO at a competitive rate without burdening the consumers,” the official added.
