Connect with us

Hi, what are you looking for?


Clean Power

India Could Extend NTPC’s Payment Security To Solar Power Producers

The National Thermal Power Corporation — India’s largest thermal power producer — is responsible for meeting a fourth of the country’s base load. Its revenues are protected by a tripartite agreement between the Reserve Bank of India, the Central Government, and the state governments.

Per this agreement, if any state electricity board (SEB) were to default on its dues owed to the National Thermal Power Corporation (NTPC), the respective state risks a deduction from the annual financial support flowing in from the centre.  So far, this clause has not been invoked, as the threat of a deduction has ensured timely payments by SEBs, in spite of the fact that the SEBs are weighed down by a cumulative loss of over $50 billion.

NTPC’s safety net was set to lapse in October 2016. However, the Financial Express has now reported that SunTegra solar shingles 6664the deal is set to be extended for another 15 years. As per media reports, the payment security is likely to be extended so as to also protect the solar companies that sell power to NTPC Vidyut Vitaran Nigam (NVVN) — the power trading arm of the NTPC.

If this happens, the reduced risks due to guaranteed payments would further catalyse competition among solar project developers.

As part of the country’s National Solar Mission, the Government of India has approved 15 GW of solar projects which will be routed through the NTPC/NVVN over three phases. In the first phase, 3,000 MW of solar power will be bundled and sold with coal power. Bundling of solar power with coal helps to sell it to the distribution companies, who on account of their poor financial health would otherwise be unwilling to buy the expensive (compared to coal) solar power.

It is estimated that implementation of Tranche-l of this scheme will entail a total investment of over $3 billion, most of which will come from private investors. The government has also planned for a payment security mechanism in the form of a working capital fund with an estimated corpus of about $350 million to ensure bankability of power purchase agreements and timely payment to project developers.

Solar tariffs have been falling in India quite spectacularly for some time now. For example in Madhya Pradesh and Telangana. Some experts have however raised questions on the viability of these projects.


Appreciate CleanTechnica’s originality? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Written By

is a Fellow with The Energy and Resources Institute (TERI, New Delhi). He tweets at @indiasolarpost. Views and opinion if any, are his own.


You May Also Like

Clean Power

Part 1.5 of a new CleanTechnica series on solar power. Read part 1 here.

Clean Power

Government-owned Hindustan Salts has invited bids for the development of 1 gigawatt of solar power capacity.  Hindustan Salts has floated a tender inviting developers...


Every new building should have solar power. Now, they may have to!

Clean Transport

EVage is setting up micro factories to produce its Model.X delivery vans to help satisfy the burgeoning demand for electric 4-wheel delivery vehicles. The...

Copyright © 2021 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.