Power ministry proposes to lower IRR for RE investments by PSUs

The Ministry of Power (MoP) has proposed the Ministry of Finance to lower the internal rate of return (IRR) from 10 per cent to 8 per cent for renewable energy investments by PSUs..

The government has also granted power PSUs in-principle nod to bid for a pre-determined RE capacity every year to bring clarity in their green capacity planning.  Central power producers have also been allowed to bundle supplies with new or untied/high-tariff hydro projects to leverage cheaper supplies for solar and wind projects so as to lower the overall cost of power from high-tariff hydro projects. The MoP will also consider waiver of transmission charges for RE capacity under its flexibility scheme. Additionally, there would be no requirement for separate power purchase agreements (PPAs) for RE projects developed under the scheme.

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