Power gencos have written to the Punjab Government, stating that the state government’s efforts to renege power purchase agreements will jeopardise investments of Rs 270 billion.
The Punjab cabinet recently accorded approval to the Punjab Energy Security, Termination of PPAs, and Redetermination of Power Tariff Bill, 2021. The bill seeks to revise the terms of around 63 renewable energy contracts totalling 750 MW and termination of agreements with 1,400 MW Nabha Power owned by Larsen & Toubro and Vedanta’s 1,980 MW Talwandi Sabo power plants. According to Association of Power Producers, if such action is allowed to go through, other states may follow suit, thereby posing a systemic risk to power sector investments including those in the renewables space.