After Andhra Skirmish, MNRE Gives ‘Must Run’ Status to RE Projects

The central government has asked states to ensure that the “must-run” status of renewable energy plants is honored and followed, and has said that if supply from these units is curtailed, the reason must be given in writing to generating companies.

The letter from the ministry of new and renewable energy to the chief secretaries of all states on Thursday follows Andhra Pradesh’s curtailment of wind and solar power over the past few days.

Andhra Pradesh, in its July order, has asked renewable energy companies to renegotiate contracts signed with the previous regime, drawing strong protests from the developers. The Andhra Pradesh High Court last week issued a stay order on the renegotiation of solar and wind PPAs, which is valid till August 22. Since then, the discoms of the state have been curtailing renewable power.

It must be added that the letter issued by the Centre does not draw attention to any state in particular.

“It has come to the notice of this ministry that in violation of above regulations some state load dispatch centres (SLDCs) are resorting to large-scale backing down of wind and solar energy,” said the letter written by B P Yadav, joint secretary in the ministry.

The letter also said “if any SLDCs curtail wind or solar power for reasons other than grid safety, they would be liable for losses incurred by the solar or wind power generator.”

Separately, the Andhra high court has also asked the concerned discoms to justify backing down of wind and solar power over the last few days.

Renewable energy companies like Acme and ReNew Power say the state’s attitude will potentially put-off investors in the sector. Several international companies and funds have invested in this sector in India.

Company executives say these investors will resent any move to renegotiate a signed contract. The blow has fallen particularly heavily on the renewables sector, both solar and wind, with close to 5.2 GW of projects with Rs 21,000 crores of debt under risk when reports last came in.