Chief Minister Sri YS Jagan Mohan Reddy lambasted the previous TDP government for its irrational and outlandish approach in signing Power Purchase Agreements (PPAs) of renewable energy which has caused huge burden on the exchequer of State. The chief minister said that the exercise was taken up only to benefit a select few with ulterior motives.
Intervening during the discussion on demands on energy, the Chief Minister has said that the previous government has taken arbitrary decisions to favour only three companies and had signed PPAs to buy wind power and solar power at a higher rate despite thermal power being available. The PPAs were signed for 25 long years, which is unheard of, he pointed out. The TDP regime even has gone to the extent of amending the relevant Act to suit its purpose and appoint a person of their choice by increasing the age limit.
Brushing aside the remarks of Leader of Opposition that the prices of any commodity would fall with the development of technology, YS Jagan said, ‘in that case why did the previous regime sign PPAs for a long period of 25 years. The PPA fixed the rate at 4.84 per unit though thermal power was available and we had to pay Rs 1.10 mandatory price whether or not we use NTPC energy. This makes the total cost run into Rs 5.94 per unit which would burden the state by Rs 2,766 crore annually.
Giving out data for the financial years 2015-16 to 2018-19 in a power point presentation, he said, the Renewable Power Obligations (RPO) was drastically increased from 5 to 5.59 % in the first year and from 11 to 23.4 % in 2018-19. In terms of units it has purchased an excess of 1,740 MU in 2016-17, 5,102 MU in 2017-18 and 6, 952 MU in 2018-19. The total burden with the purchase has accumulated to Rs 5, 497.3 crores.
The biggest flaw in the PPAs, the chief minister said, was that power was purchased from private sector despite having surplus energy at its disposal. While the availability of energy was always more that the requirement during past four years, there was energy back down in 2015-16, 2017-18 and 2018-19 while the surplus energy of 10, 473 Million Kwh was sold in open market during 2016-17.
The three companies that took away the lions share are Greenco, Renew and Mytrah and the PPAs had ended up as a big scam.
The subsidy being given by the Centre is meager and the consumption of power by industrial sector has been coming down with every passing day.