The Indian government plans to make bundling of conventional electricity with renewable energy mandatory for all generation companies in the country, including private ones, to reduce the country’s coal demand and make electricity prices cheaper or more attractive for distribution companies (discoms), Union Power Minister RK Singh said last week.
To help with this, he stated that another proposal is in the works under which all power projects, even captive ones, will be mandated to construct renewable projects at their current locations.
“Going forward, India’s power demand is going to surpass 200 GW. One of the ways we are trying to make procurement of power more attractive for buyers (discoms) is through bundling. Until now, we had the provision of bundling in tariff policies, but it was not operationalized,” Singh told reporters.
“Now, we have decided to make bundling mandatory for all generation companies. We will make it mandatory for all gencos to arrange for renewable energy as per the capacity of the thermal power station. What will happen is that the requirement of coal will come down by about 25-30% and price of power will reduce because renewable energy is cheaper,” he added.
He also stated that large industries with captive coal-based power plants will be required to establish captive renewable projects that they may blend and use. These plans will also help the country achieve its aim of 500 GW of non-fossil power generation by 2030, out of a total generation of 817 GW.
The government will issue an order to the Central Electricity Regulatory Commission (CERC) to cut the day-ahead and real-term market sealing prices from the current Rs 12 per unit, according to the minister.
The government will issue the directive to the CERC under Section 107 of the Electricity Act. It would be the second time in a month that such direction will be issued as the first directive on capping the prices of the day-ahead market and real term market was released on March 26. At the time, the cap had been decreased from Rs 20 per unit to Rs 12 per unit.