What Am I

In continuation with my previous blog on the catch-22 situation of renewable energy companies in Andhra Pradesh, India, a probable radical solution as detailed below, may be explored by the Government of Andhra Pradesh. Renewable plants boast about their ability to serve the green agenda but are still dependent on subsidies and one of the subsidy being offered to them is the "must run" category. What if this "Must run" category is revoked. None of the plants would fall in the Merit Order Despatchability Curve and scheduling them will only be subject to the discretions of the DISCOM. While this would definitely send a wrong signal to the investors, but DISCOMs are unable to make good of any pending payments, and hence they might as well explore a legal way to get around.  And what happens when the MUST RUN category is revoked. There is no fixed/variable price component difference in Solar/Wind. 95% is a fixed cost component. Hence, technically the...

This is in the context of the recent attempts of Andhra Pradesh state Government, in India to renegotiate the PPAs of existing Solar/Wind assets. To give you a brief context, the previous Government encouraged renewable power installations in an attempt to encourage green power generation in the state inspite of the government's financial conditions in not such a great condition. The new Govt., came and alleges that the contracts with those renewable assets would be renegotiated as the Govt. cannot afford payments to those companies and also that the contracts were awarded only to a few companies that had alleged relationship with members of the previous regime. AP govt has been insisting upon renegotiating the PPAs that have been signed as it is unable to honour the high cost contracts, inspite of the recommendation from govt of India to not do so. Is there any merit in the approach by AP. Before we get into further analysis, if we take a peek into the ground reality...

Any one who has basic understanding of power plants would know that every equipment and the power plant as a total requires how much power to run. For example: a standard 270 MW plant would require so much, a super critical 800 MW boiler would burn so much coal etc. One wonders though why would the total consumption for a power plant change so much. As usual, the ambiguities come from one of Reliance for one of the largest power plants in the world (Sasan UMPP) Here is a brief history of the estimates given by Reliance on its expected coal consumption: In 2007, when Sasan was awarded to Reliance it initially quoted that it would require 16 mtpa (million tonnes per annum) to run its plant In 2007, Reliance quoted that it can mine 25 mtpa of coal from the mines it was awarded. This was 9 mtpa more than the requirement. As per the approved mine plant, Reliance was allowed to use 4 mtpa beyond the requirement of the plant In 2014, NDA government canc...

BSES, is one of the two distribution franchisee companies responsible for distribution of electricity in the city of New Delhi, India. Though, BSES is owned by Reliance group, which has asset base across the value chain of electricity, the electricity supply is not assured from its counterparts in electricity generation. The other distribution franchisee owned by Tata group is vertically integrated i.e. the the distribution franchisee entity of the group purchases electricity from it's counterpart in electricity generation. In India, electricity prices are calculated by the individual suppliers, but are approved by a regulatory body, but may be squashed by the political parties. hence, the electricity prices in most of the states in India are kept low, mostly due to the influence of the political parties. It has forced the distribution franchisees to a corner, where they are compelled to supply costly electricity but at the same time cannot recover their costs from the co...