Power Sale Agreement India: What happens next ?


July 9, 2021


Solar Energy Corporation of India ( SECI ) generally signs power purchase agreements ( PPAs) with developers prior to drawing up Power Sale Agreement ( PSA) with discoms which then off take the power from developer’s projects. However discoms dont seem to be keen on buying due to various reasons.


According to report by JMK Research and IEEFA, for 18.9 GW capacity, PSA is not signed. It includes Solar, Hybrid, Solar+Manufacturing etc. So this capacity is under hold status. You might want to read the following 2 articles for more clarity

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Besides, renewable project developers are owed approximately Rs 123 billion by pan India discoms. So this limits RE players ability to further invest money in capacity building

Going Forward:

IEEFA and JMK report call PSA as missing link to reach 175 GW by 2022. 78 GW is installed, 31 GW in progress, and 27 GW in bidding stage. 19 GW is on hold due to PSA delays. However, the 27 GW is also on hold due to delay in PSA. And PSA is due to poor financial condition of discoms. So the bottleneck is not PSA, but poor financial condition and planning. What should SECI do to solve this ?

Strategy Boffins Team
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