Solar power firms in Karnataka make a beeline ahead of March open access deadline
With the March 2018 deadline for solar power projects in Karnataka to be able to be exempted from open access charges, ground level activities have picked up frantic pace to meet the deadline and avail the 10-year concession.
According to the scheme, a solar power producer is exempted from paying any fees, for 10 years, for using the government’s infrastructure if it is both producing and selling the power within the state of Karnataka. With commercial tariff in the high single digits or higher, and the price of producing solar power plummeting by the day, the scheme has led to several large corporate purchasing power directly from the producers, thereby ensuring savings of anywhere between 30% to 50%.
“For certain categories of customers, power tariff can be as high as Rs9 per unit. But thanks to the open access fee exemption, we are able to supply power to companies like Wipro Ltd, the Prestige Group, Bharti Airtel Ltd, etc. at a substantially lower rate and help them reduce their power expense,” Syed Fahad a director of the Golden Group, said.
Without the open access exemption, a consumer purchasing power directly from a solar power producer ends up paying almost the same as it would have paid to a state utility, thanks to a plethora of charges like wheeling charges, cross-subsidy charges, etc.
The downside to the exemption, however, is that not only do the state utilities lose large commercial consumers, but the government too loses out on Rs2.5-3/unit revenue. “Since 2014, the state distribution companies have not been very friendly because we are taking away their business. So, they have petitioned to Karnataka Electricity Regulatory Commission (KERC) that if the exemption continues, their financial health will worsen,” Fahad added.
Anmol Jaggi, director, Gensol Group, however, thinks that trade-off is worth it. “The state definitely loses revenue since it provides complete exemption. However, in case of Karnataka, which is energy deficit and is not integrated fully to the northern and the western grid, providing power to its consumers is more important than the loss of revenue,” Jaggi said.
Jaggi added that there has been a surge in both enquiries and construction work for deployment of solar projects under open access scheme during the past few weeks. “Many clients like Amplus, Clean Max, the Golden Group, the Shapoorji Pallonji Group, etc. are setting up projects under open access scheme in Karnataka and construction work is in full swing. In our opinion, the projects initiated by end November should achieve completion before 31 March, which is the last date for the waiver of charges,” Jaggi added.
Concurring with Jaggi, Vinay Rustagi, managing director of Bridge to India Energy Pvt Ltd, said, “Since the scheme runs out in March next year, there’s a big rush to complete projects under it. I think as much as 500-600 MW is being developed in Karnataka right now under this highly successful scheme.”
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