CAG expresses displeasure over dismal performance of renewable energy sector in Maharashtra

CAG expresses displeasure over dismal performance of renewable energy sector in Maharashtra

Asks state to step up efforts for introduction of competitive bidding for tariff

  

The Comptroller & Auditor General (CAG) of India  has expressed displeasure over the Maharashtra government for dismal performance in the renewable energy (RE) sector especially due to delay in the release of solar energy development policy, lack of execution of energy purchase agreements and violation of the statutory provision due to diversion of fund. In its report for the year ended March 31, 2015, CAG observed that despite huge potential of solar power in the state, the solar sector was not tapped due to absence of suitable policy framework of the government.

CAG, which conducted performance audit of RE sector during 2007-08 and 2014-15, said the government had not declared solar policy till June 2015 and  in its absence a nominal target of 275 MW was fixed by Maharashtra Energy Development Agency (MEDA) based on the achievement of solar power projects commissioned in the previous years. Against the target of 275 MW, projects of 325.25 MW were developed. "Due to non framing of policy, the solar sector had long been ignored and the capacity addition in this sector was insignificant despite a potential of 64,320 MW assessed by the ministry of New and Renewable Energy,'' CAG viewed. CAG's observations come when the Centre with the active participation of states proposes to add 1,75,000 MW in the RE sector by 2022.

In case of wind energy, CAG said 50 wind energy projects were commissioned during April 2014 and March 2015. The wind generators generated 68.42 million units (MUs) (April to May 2015) and fed energy into the grid of Maharashtra State Electricity Distribution Company (MahaVitaran). However, MahaVitaran did not execute energy purchase agreements with these 50 generators in January 2016 mainly due to high tariff. CAG has asked MahaVitaran and Maharashtra State Electricity Transmission Company (MahaTransco) to continue their efforts with the Maharashtra Electricity Regulatory Commission (MERC) for introduction of competitive bidding for tariff determination for the wind energy sector. 

The auditor has asked the state government, MEDA and water resources department to ensure development of identified 59 wind and 60 small hydro sites after conducting feasibility study. However, CAG suggested that MahaVitaran and MahaTransco need to devise a system to ensure timely reimbursement of expenditure incurred by  the developers on evacuation infrastructure.

''Due to shortfall of 2004 MUs in purchase of solar and non solar energy from RE operators which worked out to 7.14% of the target, the MahaVitaran may be required to deposit Rs 260.33 crore in the renewable purchase obligation (RPO) in regulatory fund as per the directive of MERC,'' CAG said.

Further, CAG noted that the state government collected Rs 2,315 crore by way of tax on sale of electricity during 2007-08 and 2014-15. The government was required to transfer the same amount to MEDA but only Rs 112.79 crore was transferred. ''The balance of Rs 2,202.21 crore was neither transferred to MEDA nor utilized for promotion of the RE sector. This resulted in diversion of the fund in violation of the statutory provisions,'' CAG remarked.

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Source:Moneycontrol.com