Dr Nirmal Singh

Responding to NC and Congress demand, BJPs Deputy Chief Minister Dr Nirmal Singh has volunteered himself to any probe in wake of allegations that he wanted his ministry to ink a power purchase agreement (PPA) with a firm intending to create a 100-MW photovoltaic energy in Kathua. This led to Power Secretary Sandeep K Nayak’s transfer.

Regardless of who was involved and where, technicalities involved with the ‘project’ was an interesting story. Permitted by state’s Science & Technology Department in 2013, Then Energy India, the Chennai based promoters of the ‘project’ were granted permission for an open access agreement with state’s power department, the same year.

In any power project three things are important. Firstly, it is permission to set-up a project. In Then Energy case being set up at private land, it was not even required had’nt the promoter require subsidy from the central government. Secondly, the evacuation system for energy for which the state government had already permitted it an open access system, meaning, the promoter could use state evacuation system to sell his power anywhere in India. Three projects being run privately are using this system to sell their energy outside J&K. Thirdly, and the most important is the PPA because if energy generated is not purchased by somebody, how the project will achieve the financial closure.

The controversial project had already met two of three requirements. It was the crucial third part that it was desperate to manage. While the power utilities in state’s, under new norms, are bound to make a fraction of their energy requirements from the renewable and solar sectors, they have the right to make purchase through transparent bidding, a process the promoter wanted the state government to escape.

The project was hanging fire since 2013 but it witnessed a lot of activity in 2015 summer. In July, Then India Energy entered into a JV with a Jammu based firm Venayak Energy and gave it 90% of its stakes! The JV agreement gives one major reason as the objective: the partner will manage the PPA with J&K government!

Though Chief Minister had desired a PPA, the PDD wanted creation of a formal policy, first.  Later PDD experts advised against purchasing this expensive power saying it has enough low cost alternatives available.

– Riyaz ul Khaliq

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