Today a meeting was held at RSA office with successful bidders of Jaipur Discom Kusum-C tender. In this meeting serious issue of low tariff was raised. Earlier Discom had not set a tariff cap and set for whatever best viable tariff comes through bidding but now they have put a tariff cap of Rs. 3.50 & 3.55 whereas minimum tariff for economic viability is Rs. 4.54.
PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan) Scheme: It is aimed at ensuring energy security for farmers in India, along with honoring India’s commitment to increase the share of installed capacity of electric power from non-fossil-fuel sources to 40% by 2030. The PM-KUSUM Scheme was launched in 2019 with 3 components: Component C has target of Solarization of 10 Lakh Grid-connected Agriculture Pumps of individual pump capacity up to 7.5 HP.
Land: Tariff Cap by Discom at Rs 3.500 & Rs. 3.55 is not economically viable at all as Cost of land is different for different bidders as per land location, ownership type and land condition.
Transmission Lines: Cost of laying transmission lines is different for each bidder due to variable distance from Grid substation Discom has kept same tariff for all distances.
Uneven cost of tariff: – It is not considered as small plants cost more and tariff is same for all capacities bidders which are unfair. Different Grid substations have different allocated capacity and subsidy accordingly, so actual tariff is different but DISCOM has put same tariff for all locations and it makes projects unviable.
Lack of Funding/ Financing: Due to the poor project economic viability –bank financing will be a major problem for bidders at this tariff. ROI is very less and banks will hardly finance them. Even with bidders own money these projects are not bankable and economically viable at all at this tariff. In Rajasthan, Banks will be reluctant to finance these projects due to poor financial viability at the proposed low tariff.
Solutions: Government should provide a commercially viable tariff for survival of successful bidders.
