Rajasthan scraps Kusum scheme projects due to delayed power purchase agreements

Jaipur: State power distribution companies have cancelled multiple projects under the Kusum scheme after developers failed to sign Power Purchase Agreements (PPAs) within the stipulated timeframe.Officials said many bidders were non-serious and hoarded capacities under Kusum-A by quoting aggressively low tariffs. Unable to sell their projects in the secondary market or develop them profitably, several developers ultimately backed out of signing PPAs.

"Recently, the energy department decided to cancel these projects so they can be re-offered in upcoming auctions," said a source in one of the discoms.

In Jaipur Discom alone, nearly 70 projects were scrapped, while around 42 were cancelled in Jodhpur, sources added.Kusum-A projects involve setting up decentralised, grid-connected solar plants of up to 2 MW capacity on farmers' barren or cultivable land, which can also be used for agricultural activities. Farmers earn income by selling the generated power to local discoms at fixed tariffs. The land can either be self-developed or leased to private developers.

Meanwhile, Rajasthan Renewable Energy Corporation Ltd (RRECL) has also halted tenders for rooftop solar plants on govt buildings, citing inefficiencies in the hybrid annuity model.

Initially, 1,000 MW was tendered for solarising govt buildings, of which only about 300 MW worth of rooftop projects were awarded. However, one developer that bagged 100 MW submitted a fake bank guarantee and withdrew funds fraudulently, leading to the project cancellation after the scam surfaced.

"RRECL is not issuing any new tenders under the annuity model for govt buildings. Many such structures are, in fact, unsuitable for rooftop installations. The corporation is now preparing a revised roadmap," said an RRECL official.