Running late, BEST okays solar power contracts

Express news service

Posted: Jan 10, 2013 at 0019 hrs IST
The BEST committee approved Wednesday signing of two agreements, worth up to Rs 963
crore, with private companies to procure solar energy for 25 years.
Congress and MNS members on the committee, however, questioned the haste with which
chairman Ashok Patil cleared the contracts, and walked out.
They wanted the plan deferred to gather more information about the companies. They also
wanted a copy of the power purchase agreement to be signed, to understand its nuances.
We cannot approve signing of contracts for 25 years when we dont have even basic
information about the companies. The way the chairman was acting today, it was obvious
corruption has taken place, said Ravi Raja of Congress.
While BEST had circulated a draft of its memorandum of understanding with Welspun Energy
for procuring 20 MW, there was no documentation for the agreement with the second
company, Accad Power.
The decision to procure additional 10 MW from Accad was an amendment to the Welspun
proposal.
We have been given time till March-end to show we are taking steps to meet our solar energy
obligation. These companies will take time to set up plants and the rate they are offering us is
much below the market rate, Patil said.
BEST had earlier signed a solar power purchase agreement with MahaGenco for 10 MW at Rs
15.61 a unit. The company, however, failed to meet the supply deadline and also declined to
renegotiate as per the latest rate of Rs 11.16 per unit approved by Maharashtra Electricity
Regulatory Commission (MERC).
BEST decided to annul the contract.
Meanwhile, it invited expressions of interest from power generators for a long-term contract to
sell solar energy.
Of the 13 bids the public utility received, Welspuns was the lowest cost.
Late last month, Accad, which had also expressed interest, wrote to BEST that it was willing to
match the Welspun price. The size of the Welspun contract would be roughly Rs 642 crore for
procurement of 20 MW at Rs 8.56 per unit, while the contract with Accad would be worth Rs
321 crore.
As per MERC norms, BEST has to procure eight per cent of its energy requirement from
renewable sources, of which .25 per cent should be solar.
The public undertaking has not been able to achieve its solar energy targets for the past two
years and has only partially hit targets for non-solar renewable energy.
Last month, MERC directed BEST to overcome the shortfall before March 2013. The regulator
may not take a lenient view and may levy penalties for future failures