DMRC’s Madhya Pradesh solar power plan runs into trouble

A June order by the power ministry on inter-state electricity transmission charges could affect Delhi Metro Rail Corp Ltd’s (DMRC’s) plan to buy power from the Rewa plant in Madhya Pradesh, forcing both DMRC and the state government to seek relief from the ministry of new and renewable energy.

DMRC may have to bear an additional 91 paise per unit cost due to inter-state transmission charges and losses from the marque project, thereby increasing the tariff from ₹3.30 per unit to ₹4.21per unit from the 750 megawatts (MW) plant at Rewa.

The June 14 order of the power ministry limits the waiver of inter-state electricity transmission charges to distribution companies, or discoms, meeting their renewable purchase obligations. Since DMRC is not a discom, it will have to pay this additional tariff referred to as the InterState Transmission System (ISTS) charges. The power purchase agreements (PPAs) for the project were inked on April 17.

According to a June 21 Madhya Pradesh government note to the ministry of new and renewable energy reviewed by Mint, “The Rewa project was conceived and the PPAs were signed when exemption on ISTS charges and losses was available on all inter-state transmission of renewable energy.”

The order “will significantly affect DMRC and discourage other institutional customers from opting for RE (renewable energy)”, the note added.

Following representations from the Madhya Pradesh state government and DMRC, the ministry of new and renewable energy has requested the power ministry to not apply its order, “for those projects that have already entered PPAs with interstate consumers other than discoms and are not paying interstate transmission charges”.

A DMRC spokesperson said a “request has been made by the ministry of new and renewable energy and is under consideration with the ministry of power”.

Spokespersons for the power and new and renewable energy ministries didn’t respond to an email seeking comment.