VIJAYAWADA: In what could help the beleaguered power sector in financial optimisation, the Union Ministry of Power has approved the request of the State government to de-allocate 125 megawatts (MW) coal power allotted to the State from the NTPC for bundling with solar power under the National Solar Mission (NSM).
Energy secretary Srikant Nagulapalli said that with this, the cash-strapped Discoms will save Rs 191.6 crore per annum in payment of fixed costs.
The Union ministry, in a letter addressed to the Central Electricity Authority (CEA) dated October 13, said that the allocation of the 125 MW coal-based power was made to AP Discoms on July 5, 2017. "Keeping in view the request from the government of Andhra Pradesh and consent received from the NTPC... it is decided to revert the 125 MW coal power to unallocated quota/pool of western region," the ministry said.
The move, the State officials said, would help minimise power procuring costs and unwanted financial burden on the Discoms. "The decision of the Union ministry will benefit Discoms, which could save `16 crore monthly and Rs 191.6 crore per annum on fixed costs," Srikant Nagulapalli said.
The state has an aggregate quantum of bundled power to the extent of 1300 MW solar and 675 MW thermal power under phase-I and phase-II in different ratios of the NSM. The State government, on July 21 this year, sent a letter to the NTPC and the union ministry that the cost of bundled power in procurement from 250 MW Solarrepro (solar power developer) was exceeding the cost of agreed solar power for the fiscal 2019-20.
As per the power supply agreement (PSA), if the cost of bundled power is more than the cost of agreed solar power, AP Discoma have the right to surrender the thermal power at any point of time during the tenure of PPA, the officials said in the letter.
"In view of the above, AP Discoms feel that they cannot accommodate costly thermal power allocated under bundled powers scheme in respect of PSA with M/s Solarrepro which is causing financial burden on Discoms and therefore by invoking the clause 'G' of PSA, it is decided to surrender 125 MW thermal power allocated from western region stations with immediate effect," the State said in the letter.