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					</table>State power distribution companies (DISCOMs) owed power generators ₹722.44 billion (~$8.64 billion) in total dues for the monthly billing cycle in June 2024, according to the <a href="https://powermin.gov.in/" target="_blank" rel="noopener">Ministry of Power</a>’s payment ratification and analysis portal <a href="https://praapti.in/" target="_blank" rel="noopener">PRAAPTI</a>.
The current outstanding dues, excluding the latest monthly dues, are ₹292.23 billion (~$3.49 billion).
The overdue before the trigger date is ₹289.07 billion (~$3.45 billion), after which the amount will increase by ₹3.16 billion (~$37.82 million) as the late payment surcharge (LPS) would apply.
The trigger date is one month after the due date of payment or two and a half months after the presentation of the bill by the generating company, whichever is later.
The DISCOMs are allowed to pay the outstanding amount in up to 48 installments.
Uttar Pradesh DISCOMs had the highest dues at ₹98.89 billion (~$1.18 million), followed by Maharashtra at ₹94.94 billion (~$1.13 billion) and Tamil Nadu at ₹88.48 billion (~$1.05 billion).
The recently published twelfth annual integrated ratings of DISCOMs <a href="https://www.mercomindia.com/gujarat-discoms-top-annual-ratings" target="_blank" rel="noopener">recorded</a> significant financial and operational performance shifts. Of the 55 DISCOMs evaluated for the financial year 2023, 17  improved their grades, while 14 were downgraded.
Fourteen DISCOMs achieved an A+ grade compared to 10 last year. Six of these top DISCOMs are from Gujarat, three from Odisha, and two from Haryana. Eight of these top performers are privately owned companies.
Last December, the Ministry of Power <a href="https://www.mercomindia.com/ministry-to-regulate-discoms-failing-to-clear-dues/" target="_blank" rel="noopener">proposed</a> regulating short-term and general network access for DISCOMs who fail to clear their dues after two and a half months by amending the Electricity (Late Payment Surcharge and Related Matters) Rules 2023.
The ministry <a href="https://www.mercomindia.com/discoms-atc-losses-drop-15-41-fy23" target="_blank" rel="noopener">highlighted</a> in its year-end review that the Aggregate Technical and Commercial (AT&amp;C) losses of DISCOMs decreased to 15.41% in the financial year (FY) 2022-23 from 17% in FY 2021-22. The ministry attributed the improvement to the various measures taken under the Revamped Distribution Sector program.

Uttar Pradesh DISCOMs Owed the Highest Dues to Power Generators in June

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					</table><a href="https://www.mercomindia.com/seven-companies-10-gwhcell-capacity-pli/" target="_blank" rel="noopener">The Ministry of Heavy Industries’ tender to select manufacturers for Advanced Chemistry Cells under the Production Linked Incentive program has garnered bids seven times</a> more than the 10 GWh capacity to be awarded. The bidders are ACME Cleantech Solutions, Amara Raja Advanced Cell Technologies, Anvi Power Industries (Gensol Group), JSW Neo Energy, Reliance Industries, Lucas TVS, and Waaree Energies for a cumulative capacity of 70 GWh.
<a href="https://www.mercomindia.com/seci-solar-project-storage-ladakh/" target="_blank" rel="noopener">Solar Energy Corporation of India has invited bids for the design, engineering, supply, construction, erection, testing, commissioning, and operation</a> and maintenance of a 25 MW solar power project with a 20 MW/50 MWh battery energy storage system at Taru, Leh, UT of Ladakh, India. The last date for the submission of bids is May 13, 2025. Bids will be opened on the same day. Bidders must pay ₹29,500 (~$355) as a tender processing fee.
<a href="https://www.mercomindia.com/gencos-can-sell-surplus-power-market/" target="_blank" rel="noopener">The Ministry of Power has clarified that power stations must always be available and ready to dispatch power according to the Tariff Policy 2016.</a> Power generators can sell surplus power in the power market to best use unutilized generation capacity. The clarification, sent to energy departments of all states and generating companies, comes amid concerns that some power generators are not offering surplus power in the power market, leading to unused capacity.
<a href="https://www.mercomindia.com/ntpc-rel-bos-solar-project-in-karnataka/" target="_blank" rel="noopener">NTPC Renewable Energy has invited bids to supply the balance of system package for 1.1 GW inter-state transmission system-connected wind power projects in Bijapur</a>, Karnataka (Tranche II). Bidders must procure land for the project and develop infrastructure, such as roads and substations. The last date to submit the bids is May 27, 2024. Bids will be opened on the same day. The cost of bidding documents is ₹22,500 (~$270). Additionally, all bids must be supported by a bid security declaration.
<a href="https://www.mercomindia.com/sjvn-green-bos-tender-maharashtra/" target="_blank" rel="noopener">SJVN Green Energy has rolled out a tender for the supply and installation of Balance of System packages, including power evacuation infrastructure</a> and comprehensive operation and maintenance services for three years for 400 MW of solar photovoltaic power projects across four locations in Maharashtra. The last date to submit bids is May 14, 2024. Bids will be opened on the same day. The 400 MW solar capacity encompasses four separate projects.
<a href="https://www.mercomindia.com/maxeon-patent-infringement-claims/" target="_blank" rel="noopener">Maxeon Solar Technologies, a Singapore-based solar solutions provider, has filed infringement claims against Canadian Solar, REC Solar, and Hanwha for violating three patents</a> relating to the TOPCon (tunnel oxide passivated contact) technology it holds. It has been alleged that the three companies were manufacturing, importing, and selling N-type solar panels using TOPCon cells. In lawsuits filed in the federal district court in Texas, Maxeon has sought damages from the three companies and injunctions to stop making or selling N-type panels using TOPCon cells.

Daily News Wrap-Up: Seven Companies in Race for 10 GWh ACC Capacity Under PLI

The Ministry of Power (<a href="https://powermin.gov.in/" target="_blank" rel="noopener">MoP</a>) announced that it is working on a program to mitigate the financial woes of the Distribution Companies (DISCOMs) by liquidating their dues.
The delay in payments by DISCOMs to generating companies adversely impacts the companies&#8217; cash flow. The generators need to make provisions for the input of supplies like coal and other raw materials to operate their power plants without interruptions.
As per data available on the <a href="https://praapti.in/" target="_blank" rel="noopener">PRAAPTI</a> portal, as of May 18, 2022, the DISCOMs owed power generators ₹1.18 trillion (~$15.20 billion) in overdue payments and ₹68.39 billion (~$881.13 million) in late payment surcharge dues.
The proposed program enables payment of these financial dues in easy installments by the DISCOMs. They will be offered a one-time relaxation wherein the outstanding amount, including the principal and the late payment surcharge, will be frozen on the date of the notification without the further imposition of late payment surcharges.
The DISCOMs will be provided the flexibility to pay the outstanding amount in up to 48 installments. The liquidation of outstanding dues in a deferred manner without imposing a late payment surcharge is expected to give DISCOMs time to shore up their finances.
The generating companies would benefit from assured monthly payments that were not forthcoming.
In case of delay in payment of an installment by the DISCOM, the late payment surcharge will be payable on the entire outstanding dues.
As a result of the proposed program, the DISCOMs are expected to save an amount of ₹198.33 billion (~$2.56 billion) on the late payment surcharges in the next 12 to 48 months.
States like Tamil Nadu and Maharashtra, with large outstanding dues, will save over ₹45 billion (~$579.70 million) each. Uttar Pradesh would save around ₹25 billion (~$322.06 million), while Andhra Pradesh, Jammu &amp; Kashmir, Rajasthan, and Telangana will save between ₹11 billion (~$141.71 million) and ₹17 billion (~$219.01 million).
The saving by DISCOMs will benefit the electricity consumer with a reduced burden of late payment surcharges in the retail tariff. The measure is expected to provide timely liquidation of the amount outstanding, which is critical to the generating companies more than the amount foregone on these surcharges.
The ministry said that suitable measures would be put in place to ensure that DISCOMs pay their dues to generating companies regularly, failing which the supply to the DISCOMs would be reduced.
Early this year, Union Power Minister R.K Singh <a href="https://mercomindia.com/power-minister-steps-improve-health-discoms/" target="_blank" rel="noopener">outlined</a> the various steps taken by the government to help improve the financial health of the distribution companies (DISCOMs) in the country.

Ministry of Power Proposes New Program to Liquidate the Past Dues of DISCOMs

The Ministry of Power (<a href="https://powermin.gov.in/" target="_blank" rel="noopener">MoP</a>) has released the framework for implementing the Market-Based Economic Dispatch (MBED) &#8211; Phase 1 program to reduce consumers’ power purchase costs by 5%.
MBED will ensure that the cheapest generating resources across the country are dispatched to meet the overall system demand. The ministry said it would be a win-win situation for both the distribution companies (DISCOMs) and the generators, resulting in significant savings for electricity consumers.
The power demand by all states is proposed to be met through a central pool allocating power at the optimal price. Currently, DISCOMs have been sourcing power from available sources within the states, invariably ending with a higher energy cost.
The implementation of MBED – Phase 1 is expected to begin from April 1, 2022. The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/">CERC</a>) will conduct trial runs to ensure the system runs smoothly. Interstate generation facilities will participate in the first phase, while other generation facilities can join voluntarily.
The ministry said that the time is right for optimizing generating facilities to deliver benefits of reduced operating costs to distribution utilities and end consumers. With substantial generation capacity additions over the past few years, a robust day-ahead market will also form the basis for transitioning away from the country’s over-dependence on longer-term power purchase agreements to sustainable market-based operations.
Implementing MBED in the day-ahead horizon is an essential step in reforming electricity market operations and moving towards ‘One Nation, One Grid, One Frequency, One Price.’
In June 2021, the ministry <a href="https://mercomindia.com/ministry-proposes-new-mechanism/" target="_blank" rel="noopener">issued</a> a discussion paper on MBED for stakeholders to submit their feedback.  In July, it also organized a consultation workshop with state governments and DISCOMs, regulatory commissions, and state power generating companies in August.
Considering total power generation of 1,393 billion units in the country with a weighted average power price of ₹2.36 ($0.032)/kWh, the savings from the proposed mechanism would be 3.74%, amounting to ₹122.95 billion ($1.69 billion), the ministry had then said.
Mercom had earlier <a href="https://mercomindia.com/integrated-day-ahead-market-proposed-in-exchanges-for-conventional-renewable-energy/" target="_blank" rel="noopener">reported</a> that the ministry had decided to set up an integrated day-ahead market (DAM) at the power exchanges with different price formations for power generated from renewable energy and conventional power.
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First Phase of Market-Based Economic Dispatch of Power to Start from April 2022

Power distribution companies (DISCOMs) in Andhra Pradesh, Telangana, and Karnataka are staring at acute power shortages as the National Thermal Power Corporation (NTPC) has warned that it will stop supply due to non-payment of dues.
The three states together owe NTPC ₹58.38 billion (~$814.99 million) in outstanding power bills (both conventional and solar). A total amount of ₹18.84 billion (~$262.6 million) is due to be paid by these DISCOMs to NTPC for solar power supplied under the National Solar Mission (NSM).
<a href="https://mercomindia.com/wp-content/uploads/2019/02/nn.png"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-12614" src="https://mercomindia.com/wp-content/uploads/2019/02/nn.png" alt="DISCOMs Owe ₹18.84 Billion to NTPC in Outstanding Bills for Solar Projects" width="605" height="216" srcset="https://cms.mercomindia.com/wp-content/uploads/2019/02/nn.png 605w, https://cms.mercomindia.com/wp-content/uploads/2019/02/nn-600x214.png 600w, https://cms.mercomindia.com/wp-content/uploads/2019/02/nn-300x107.png 300w" sizes="(max-width: 605px) 100vw, 605px" /></a>
Dues amounting to ₹15.9 billion (~$221.8 million) have been outstanding for more than two months.
When contacted, an NTPC official said, “We have approached these DISCOMs to pay the pending dues but to no avail. Now, according to new regulations, the NTPC will cease supplying power to these DISCOMs from February 6, 2019.” These are NTPC’s self-owned projects.
Elaborating further, the NTPC official sad, “We won’t completely stop the supply as that would create a problem for citizens of the country. Instead, the NTPC will reduce the quantum being supplied to these DISCOMs until clearance of all dues by them.”
This also brings to fore the suffering of renewable energy generators because of non-clearance of dues by DISCOMs. Financing renewable energy projects is not an easy task in India as banks and financial institutions are wary of lending to projects focused on intermittent sources of energy when projects based on coal are turning into non-performing assets (NPAs).
In case of NTPC, it can make the defaulters pay by virtue of its massive generation capacity, but for smaller players in the renewable energy sector it becomes a matter of survival as they are completely dependent on the whims of DISCOMs.
The Ujwal DISCOM Assurance Yojana (UDAY) program was supposed to be <a href="https://mercomindia.com/states-progress-uday-program/" target="_blank" rel="noopener">helping some DISCOMs</a> stuck in a debt-rut. Based on the non-payment of dues, it does not look like UDAY has helped the financial situation of DISCOMs.
Recently  <a href="https://powermin.nic.in/en/content/power-sector-glance-all-india" target="_blank" rel="noopener">Ministry of Power</a> constituted a new committee to study and submit recommendations into the issue of <a href="https://mercomindia.com/ministry-power-committee-solutions-payment-delay-discoms/" target="_blank" rel="noopener">delayed payments</a> by DISCOMs to power generating companies and independent power producers. The sooner the final results are published, the better it will be for renewable energy sector.
Image credit: RESOL

DISCOMs Owe ₹18.84 Billion to NTPC in Outstanding Bills for Solar Projects

The <a href="https://powermin.nic.in/en/content/power-sector-glance-all-india" target="_blank" rel="noopener">Ministry of Power</a> (MoP) has constituted a new committee to study and submit its recommendations into the issue of delayed payments by distribution companies (DISCOMS) to power generating companies (GENCOs) and Independent Power Producers (lPPs).
The terms of reference for the committee to deliberate has been set by the government as follows-
<ul>
<li>Study the working capital cycles of DISCOMs and GENCOs with respect to power procurement for all competitively bid and regulated PPAs, and identify gaps that may be contributing to the GENCOs’ stress</li>
<li>Study the frameworks of the rules and regulations in regard to payment mechanisms and transaction structures across the power sector value chain currently</li>
<li>To explore possibilities and suggest a mechanism for prepaid system of transactions from DISCOMs to generators for power purchase</li>
</ul>
According to the memorandum issued by the MoP, the ministry has already sent an advisory to all states for moving towards prepaid smart metering solutions for all consumers in the next three years.
It says- “ln this regard, a view has emerged that the payments from DISCOMs to the GENCOs may also be moved towards a prepaid system.”
The committee has one month to submit its recommendations.
<a href="https://mercomindia.com/power-generators-terminate-ppa-discom-default-proposal/" target="_blank" rel="noopener">In November 2018,</a> the government of India constituted a high-level empowered committee on July 29, 2018 chaired by the <a href="https://cabsec.gov.in/" target="_blank" rel="noopener">Cabinet Secretary</a> to address the issues of stressed thermal power projects.
<a href="https://mercomindia.com/power-ministry-praapti-app-transparency-payments/" target="_blank" rel="noopener">In May 2018</a>, MoP launched a web portal and an app called PRAAPTI (Payment Ratification and Analysis in Power procurement for bringing Transparency in Invoicing of generators) to bring in greater transparency in power purchase transactions between generators and distribution companies.
<a href="https://mercomindia.com/mercom-exclusive-payment-delays-increasing-risk-project-costs-solar-wind-projects-many-states/" target="_blank" rel="noopener">Earlier</a>, Mercom reported how payment delays by DISCOMs is posing a challenge for the growing renewable energy sector in India.

Ministry of Power Sets Committee to Recommend Solutions for Payment Delays by DISCOMs

In a bid to diversify its portfolio, the state-owned Neyveli Lignite Corporation India Limited (<a href="https://www.nlcindia.com/new_website/index.htm" target="_blank" rel="noopener">NLCIL</a>), has announced its foray into power trading business.
In a statement issued by the company, NLCIL said that it has received Category I licence from the Central Electricity Regulatory Commission (CERC) for power trading in the country.
Earlier in 2016, NLCIL had started trading Un-Requisitioned Surplus Power (URS) through NTPC Vidyut Vyapar Nigam limited (NVVN). This had generated a total revenue of ₹1.34 billion (~$0.020 billion) for NLCIL in 2016-17, and the revenue later increased to ₹2.94 billion (~$0.043 billion) in 2017-18.
The new development makes NLCIL an independent power trader in the power market. It aims to employ an exclusive power trading arm for its power trading activity. NLCIL will procure power for this purpose through bilateral agreements from generation companies (GENCOS).
This will enable the surplus power from GENCOS to be effectively utilized, which otherwise would have gone waste.
According to Mercom’s <a href="https://mercomindia.com/product/india-solar-project-tracker/" target="_blank" rel="noopener">India Solar Project Tracker</a>, NLC India has operational solar projects aggregating 140 MW and has a project pipeline of around 1.2 GW.
NLC India targets to develop 4 GW of solar projects by 2022.
<a href="https://mercomindia.com/nlc-commissions-300mw-solar-tamil-nadu/" target="_blank" rel="noopener">Mercom recently reported that</a> NLC India commissioned 300 MW of grid-connected solar photovoltaic (PV) projects in the state of Tamil Nadu.
<a href="https://mercomindia.com/nlc-india-20-mw-tender-andaman/" target="_blank" rel="noopener">In March 2018</a>, it also tendered 20 MW of grid-connected solar PV project with Battery Energy Storage System (BESS) to be developed on the island of Andaman &amp; Nicobar.
<a href="https://mercomindia.com/nlc-india-loss-delays-commissioning-solar-projects/" target="_blank" rel="noopener">Recently</a>, Mercom also reported that NLCIL might have to bear a loss of ₹1.36 (~$0.020)/kWh for the 500 MW of grid-connected solar projects, which are being developed in the state of Tamil Nadu due to delays in commissioning.

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