The Ministry of Power Plan seeks to boost renewable energy uptake by introducing green tariffs but according to a report published in Energy World, a study by the Centre for Social and Economic Progress (CSEP) shows that this green push can hurt the distribution companies financially.
The distribution companies are already under financial pressure; the burden of green tariffs will impact them harsher if the high-paying commercial and industrial companies shift to this low-paying green option.
Furthermore, adding to this financial challenge, there are some operational challenges also that may impact the distribution companies, like getting reliable supply of green energy and its imminent nature.
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Re-evaluation of green tariff
According to CSEP, green tariffs result in a 15 percent financial loss of the average cost of green energy supply, putting a financial strain on energy distribution companies.
The changes in the cost of procurement of renewable energy in different parts of the country is also different, as in places like Kerala, the cost is lower because of the hydroelectric energy from dams and the cost in states like Rajasthan is higher because of its higher cost of wind energy.
The CSEP study urges for the re-evaluation of this tariff proposal for the push of green energy as it has many discrepancies and miscalculations, which can lead to the financial loss of the distribution companies that try to adopt green energy distribution.
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