How The Costs Of The Adani Bribery Scandal Will Be Borne By India’s Electricity Consumers & May Increase Power Cuts
https://article-14.com/post/how-the-costs-of-the-adani-bribery-scandal-will-be-borne-by-india-s-electricity-consumers-may-increase-power-cuts--6741c1d1d3a18 M Rajshekhar
India’s solar power market suffers from a strange infirmity. Tenders for solar power are floated by SECI which, after finalising winners, tries to get discoms to buy the power it has already auctioned. Once they concur, SECI signs power purchase agreements with developers.
This design, created to insulate developers from the vagaries of discoms, comes with its own infirmities. Most SECI tenders don’t find takers—cash-strapped discoms, unable to shoulder the accompanying costs of intermittency, go slow on renewables; at other times, they choose to wait for solar tariffs to drop further.
In the case of the manufacturing-linked tender too, the calculations of Adani, Azure and SECI went awry. Finding the projected price from the tender too high—and expecting lower tariffs in the future—discoms refused to buy. ..
By July 2021, Odisha agreed to buy 500 MW in return for “hundreds of thousands of dollars”. In August that year, after Adani met then-Andhra Pradesh chief minister Jagan Mohan Reddy and allegedly offered him $228 million (Rs 1,750 crore), Andhra agreed to buy 7,000 MW from SECI.
By February 2022, Jammu and Kashmir (J&K), Tamil Nadu and Chhattisgarh had acquiesed as well. The total amount paid to these five states stood at Rs 2,029 crore (about $265 million).