Andhra Pradesh Government Now Says it Will Only Target PPAs of Corrupt Wind Projects

The state has served notices to numerous project developers in the past asking them to renegotiate their PPAs

August 21, 2019


In a welcome development, the ongoing feud between the renewable industry and the new administration in the state of Andhra Pradesh could be deescalating. The state government may take a U-turn on its stance to revisit the power purchase agreements (PPAs) for wind energy and solar photovoltaic (PV) projects.

“There was a misunderstanding, and therefore, the letters were sent to the power generators seeking a revision in the PPAs. The state government does not want to revisit all PPAs,” informed a state government official.

When asked to elaborate on the change, the official said, “No solar PPA will be revised as all of those projects have been awarded by following the competitive bidding guidelines. Yes, wind energy PPAs will be under scrutiny.”

“As you know, the bidding guidelines for wind energy projects came in much later and many wind projects were awarded in the beginning of the previous government’s tenure. This had led to assumed kickbacks for certain officials and others involved. So, the wind PPAs will be scrutinized, and then projects in which malpractices are suspected, action on those PPAs will be taken,” added the government official.

After coming to power, Jaganmohan Reddy’s newly-formed government appointed a committee to deliberate and bring down the costs in all the high-priced PPAs for wind and solar power projects signed during the term of the previous government, alleging corruption.

Earlier, Mercom reported on Power Minister R. K. Singh’s letter to Reddy, cautioning him to practice restraint on matters like the renegotiations of PPAs for wind and solar energy projects. In his letter, Singh had asked the chief minister of Andhra Pradesh to act in a manner that is fair, transparent, and according to the law.

Singh had pointed out to Reddy that reopening and canceling of a contract can only be done in cases where corruptions have been proved based on evidence.