Govt. to make honouring PPA legally binding: R.K.Singh, MoS (IC) Power and New and Renewable Energy, GOI

18 October, 2017

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Govt readies legislative changes to boost investor sentiment in power sector

The government is planning a slew of legislative measures to boost investors’ sagging confidence in the power sector and promote consumption of electricity from renewable sources.

“We are going to change law that will require that every power purchase agreement (PPA) signed is honoured,” Power Minister RK Singh said here on Thursday, 26th October, 2017 in New Delhi, adding, “Failing that, stiff penalty will be imposed”. He was addressing Assocham’s Third Global Investors’ India Forum-2017.

Singh also promised to bring new law to make it mandatory for power distribution companies (discoms) to tie up 100% electricity to cater to the areas they serve. 

He also said that the government will insert provisions in law that compliance with Renewable Purchase Obligation (RPO) will be a statutory requirement.

“I am going to make to provide in law that RPO will be mandatory, legal and statutory,” the minister said.

Singh also said his government has the target to triple per capital electricity consumption in 7-10 years and identified government’s “Power for All’ as a key driver of electricity demand. 

He said nothing can be done without electricity and  therefore, electricity demand will grow.

“I am looking at a future where consumption of electricity will go up,” the minister said, adding, “We see electricity as a primary source of energy”.

He encouraged the industry to approach him with its problems, saying he would try to address all genuine issues. 

Highlighting the urgency for further reforms in the state power sector, Singh said there has to be a limit to cross-subsidising of electricity cost, otherwise the industry would not be competitive.

“If you do not make electricity tariff competitive for the industry, it will never grow,” the minister said.

 “We will agree on a band for cross-subsidisation,” he said hopefully. 

The issue will be taken up for consultation in the forthcoming conference of state power ministers, he assured.

Speaking earlier at the event, Shantanu Chakraborty, head, business development, Brookfield India Office Parks, said, “Ease of doing business is about certainty and speed. Discretion has to go out and objectivity to come in.”

R Chandrashekhar, President, Nasscom, said,” Automation, artificial intelligence are having impact on the quantity of jobs and skills.”