Five Independent Power Producers (IPPs) have agreed to terminate their Power Purchase Agreements (PPAs). Once the agreements are finalized, these IPPs will halt operations under their current contracts. They will receive payment for their outstanding dues based solely on the cost of electricity, without any interest or future payments, as reported by TheNews.
The government is also in negotiations concerning past capacity payments estimated at around Rs. 80-100 billion. IPPs operating under a Build, Operate, Own, and Transfer (BOOT) model will be transferred to the government, while those not under BOOT will remain with their existing owners. This termination is anticipated to save the government Rs. 300 billion in capacity payments over the next 3 to 10 years, providing relief of Rs. 60 billion annually to consumers.
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Additionally, the government has identified 17 more IPPs that will transition from a take-or-pay to a take-and-pay model under the same power policies. These IPPs will continue supplying electricity until a private power market is established, at which point they will be allowed to sell electricity directly to clients with reduced wheeling charges.
The task force is also working on lowering tariffs for wind and solar power plants. Currently, some solar plants charge Rs. 27 per unit, while wind IPPs charge Rs. 40 per unit.
