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The government will soon offer a long-term financing scheme to revive stalled hydropower projects and subsidies to encourage local manufacture of solar panels, Union power minister Piyush Goyal said on Friday, listing out priorities for his third year in office.
The government wants to fix the stressed areas of the power industry such as hydropower and leverage the massive capacity addition planned in solar power generation—from 6.7 gigawatts (GW) at present to 100GW by 2022—to boost domestic manufacture of panels and equipment. Talking to reporters, Goyal said a scheme for providing long-term funds to hydropower projects is being worked out.
He said he will speak to state power ministers on how they could help stalled hydro power projects revive. The power ministry is also working on a comprehensive policy to encourage hydropower generation. “We are also finalizing a policy on financial support for solar power equipment manufacturers, proposed by the NITI Aayog. The amount of subsidy needed to be competitive in the market will be determined through a reverse auction,” Goyal said.
Manufacturers receiving subsidy will also get an assured market for supply of panels and equipment for a specified number of years. The scheme will be available for both existing and new players, Goyal added. “The ramping up of the solar target to 100GW by 2022 is a big boost to demand, both from a generation as well as from a manufacturing perspective. The demand for power generation grows in the wake of more and more bidding announcements. To motivate domestic manufacturers to keep pace with the growth, a large amount of capex as well as a policy to incentivise manufacturing is needed,” said Sunil Jain, chief executive officer and executive director, Hero Future Energies Ltd.
The minister said he will enable private power distribution companies to also benefit from certain aspects of the Ujwal Discom Assurance Yojana (UDAY), designed for turning around debt-ridden state-run power distributors. For this the scheme will have to be amended.
While it is for the state governments concerned to decide whether to take over the debt of a particular private power distributor, the central government is open to letting these utilities get the operational benefits of the scheme, he said. Private distribution companies like BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd had approached the Delhi government last November for joining the scheme.
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