Power distribution companies (discoms) owe Rs 1 trillion to power generating companies (gencos) till the end of February 2022.

According to data on the PRAAPTI Portal, at the end of February 2022, a total outstanding amount of Rs 1,00,931 crores is due from discoms.

The outstanding amount becomes overdue after 45 days of raising the bill for power supply by power generating companies (gencos).

The Minister of Power, R K Singh, told the media that the government had taken initiatives to improve financial and operational efficiencies of discoms linked to reform measures such as Liquidity Infusion Scheme (LIS), additional borrowing of 0.5% of gross state domestic product (GSDP) to states linked to power sector reforms, introducing additional prudential norms for lending by Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) based on the performance of power utilities, and Revamped Distribution Sector Scheme (RDSS).

The government had also issued an order, opening and maintaining Letter of Credit (LC) as payment security under power purchase agreement (PPA) by Distribution Licensees.

This order directs National Load Dispatch Centre (NLDC) and Regional Load Dispatch Centres (RLDC) to dispatch power only after intimating by genco and discom confirming the LC.

The Minister said that these government initiatives would improve the financial health of discoms, improve liquidity and reduce the outstanding dues to gencos. Singh said that as per projections of the Central Electricity Authority (CEA), the share of coal-based thermal power generation capacity in 2030 would be around 32% in the energy mix, compared to the current share of 52%.

He added that 36.79 crores LED bulbs were distributed till 16 March 2022, which led to 47,784 million units of electricity savings per annum, peak demand reduction of 9,566 MW and reduced carbon emissions to 38.70 million tonnes (mt) annually.

Singh said that Energy Efficiency Services Limited (EESL) has installed over 1.23 crore LED street lights in urban local bodies (ULBs) and gram panchayats in India, saving 8,516.7 million units of electricity per annum, peak demand reduction of 1,419.45 MW and reduced emissions to 5.87 mt annually.

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