Rajasthan: RVUNL’s investments in solar energy could weigh more on consumers | Jaipur News

JAIPUR: The indebted Rajasthan Vidyut Utpadan Nigam Ltd (RVUNL) has decided to set up solar power plants with a capacity of 800 MW and invest around 3,200 crore rupees despite the trend of discoms from other states and entities purchasing electricity preferring the path of a third party through tendering which has lowered the costs of renewable energy to around Rs 2 per unit.
Financially, RVUNL is not able to contribute up to 30% of the project capital either, even if it mobilizes loans from banks. Nigam already owes lenders around Rs 24,000 crore and the interest he would pay will not be cheaper given the credit profile.
Experts in the power sector said that instead of investing such a huge sum, RVUNL had better get cheaper solar power through a developer in RESCO mode. renewable energy) and mix it with thermal energy, which would avoid the huge burden of the loan.
Andhra Pradesh is working on a strategy to provide cheaper electricity to farmers by setting up 10 GW solar power plants through private investors instead of making the heavy investment itself. Private developers will be selected through competitive bidding and electricity will be purchased by the government at much lower rates to reduce the burden of their subsidies without any investment.
Rajasthan has the highest installed solar power capacity in the country with 7,737.95 MW. Its maximum capacity has been installed by developers or investors and the electricity produced is exported to various discoms and power purchasing entities including SECI, NTPC, Maharashtra, Haryana and UP. Electricity is purchased by these agencies at more advantageous prices without making heavy investments unlike the 800 MW projects proposed by RVUNL.
Simran Grover, CEO of Bask Research, said: “There is an opportunity for RVUN to drive Rajasthan’s clean energy transition through solar power and other low carbon technologies and storage. However, there is a word of warning. If such investments are authorized under the cost price regime or regulated tariffs, they will be counterproductive for the sector, the State and consumers of electricity.
He said RVUN should participate in a free and fair competitive market to avoid unnecessary inefficiencies in the path of the clean energy transition.
In a cost-plus pricing mechanism, the seller calculates all the costs, fixed and variable, incurred to generate electricity, and then applies a percentage mark-up to those costs to estimate the asking price. In this model, the inefficiencies of the power generator are passed on as a cost while, as in a bidding and third party mechanism, the cost is much cheaper. In recent tenders, solar power prices have fallen to Rs 2 per unit, which is expected to be much higher in the case of a cost plus approach.
Previously, RVUNL had made large investments for the establishment of the Giral lignite plant, the Ramgarh gas plant and the Dholpur gas plant. But they are not used correctly and the investments made by RVUNL become bad debts. All of these reckless financial decisions have added to the high cost of electricity paid by the people of Rajasthan.
The model of development of infrastructure projects by government organizations is not profitable unlike private investors. Most motorway, airport and urban infrastructure projects are developed by private investors or through a PPP model for greater efficiency.

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