Three southern states — Tamil Nadu, Andhra Pradesh and Telangana — that have strong renewable energy capacity account for about 71 per cent of outstanding dues from power distribution companies (discoms) to renewable energy producers.
The country-wide overdue of conventional generators amounted to ₹1,065 billion in July 2020, whereas ₹103 billion is overdue to renewable power generators, said a report of JMK Research & Analytics, quoting PRAAPTI (Payment Ratification and Analysis in Power procurement for bringing Transparency in Invoicing of generators) portal of the Union Power Ministry.
Threat to renewable sector
Piling overdue and payment delays can render the renewable projects unviable, which are already facing other risks such as tariff renegotiation, which may deter lenders who are cautious about committing funds to such projects, potentially driving up the finance cost. This vicious cycle can seriously hurt the renewable sector, the report warned.
The major problem with discoms, despite various steps taken, is revenue deficit. The cost of power procured by a discom is generally higher than the tariff charged to consumers.