No More Solar Bids For Karnataka

• The state electricity regulatory commission of Karnataka, KERC has issued a directive for state renewable energy development agency KREDL to not go ahead with any more solar tender or auction activity in the state
• KERC cites the fact that the state is already power surplus and that it has enough solar power to meet its RPO for not just current FY, but also for next 2 FYs
• Procuring more solar power than required will endanger grid stability, and also be a financial challenge for discoms that are already struggling to pay companies for the same
• State is already bound to pay fixed tariff to thermal power projects even if it is not used, hence no more solar power for the state for the time being

The Karnataka Electricity Regulatory Commission (KERC) has directed Karnataka Renewable Energy Development Limited (KREDL) to stop all solar power tender and auction processes for the state for the time being. The logic is that Karnataka already has excess power.

Mercom India Research says according to KERC, to be able to accommodate renewable energy, electricity distribution companies (discoms) will have to curtail thermal power supply, but will have to pay fixed tariffs to thermal projects even if it is not used. Additionally, the discoms are in possession of enough solar power to meet their renewable purchase obligation for the next 2 financial years after 2019-20.

According to KREDL till the end of March 2019, Karnataka's commissioned solar power capacity was 6,127 MW.

Further, the commission noted that some discoms are unable to make payments on time for solar power procurement due to paucity of funds. Using more solar power than what is required may lead to grid stability, it claimed.

A KREDL official speaking to Mercom clarified that while state agencies will not be issuing any more solar tenders, central agencies like the Solar Energy Corporation of India (SECI), National Thermal Power Corporation (NTPC) can continue to tender and auction PV capacity with interstate transmission system (ISTS) connectivity. The President of the Karnataka Solar Energy Society (KSES) on LinkedIn said, this policy of the state does not apply for open access solar projects.

On LinkedIn, the opinion seems divided as some people argue the environmental benefits that solar energy brings should be weighed before halting further development also considering the fact that some of the states aren't doing as much as Karnataka. Others feel the state has to look at its own financial condition and if it is already having excess power available, it shouldn't be looking beyond for more.