Andhra Pradesh Launches Policy to Export Renewable Power to Other States
Priority would be given to developers who intend to set up the projects along with manufacturing facilities in the state
July 21, 2020
The Government of Andhra Pradesh (GoAP) has announced its Renewable Energy Export Policy 2020 for solar, wind, and wind-solar hybrid projects.
The policy aims to promote the export of renewable energy outside the state without any obligation of power procurement by state distribution companies (DISCOMs). The policy will remain in force for five years from its date of issue, and all registered companies in the private and public sectors are eligible to participate in project development. The power generated from these projects will be exported outside the state.
The policy noted that if power is supplied under open access, all charges and connected regulations issued by the Andhra Pradesh Electricity Regulatory Commission (APERC) would be applicable. It added that resources would be allocated on a ‘first-come-first-serve’ basis, and priority would be given to project developers who intend to set up the projects along with manufacturing facilities in the state.
The government noted that the state has significant potential for power generation through these projects, and the conditions were ideal for setting up renewable projects to export power to other states. It cited factors like the vast availability of land, large programs like the Ultra Mega Renewable Energy Power Park (UMREPP) program, and the fact that the state has already achieved its renewable purchase obligation (RPO) targets. Notably, the Ministry of New and Renewable Energy recently modified its guidelines for the development of solar parks and ultra-mega solar power projects. The program was initiated in December 2014 to facilitate solar project developers to set up projects through a plug and play model.
The objective of the policy is to facilitate 120 GW of renewable energy projects in the state and to set aside at least 500,000 acres of land for lease to potential renewable energy export project developers, and to develop renewable energy equipment manufacturing facilities in the state. It also aims to attract private investments to the state and develop the local economy to generate additional revenue for the state government.
The policy said that the state government would procure and aggregate government and private lands for lease to project developers through a land aggregating agency like New & Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP), among others. The land will be leased by the nodal agency for 30 years to developers, along with prescribed charges.
The land aggregating agency will then remit the obtained lease amounts to the government treasure in the case of government lands, while in the case of private lands, they will have to remit ₹6,000 (~$80)/acre annually with 5% escalation every two years.
Project developers will have to pay lease rentals at ₹31,000 (~$415)/acre annually for the entire duration of the lease period, with an escalation of 5% every two years.
Project developers will also have to pay Green Energy development Charges of ₹100,000 (~$1,340)/MW of the installed capacity every year for the entire lifetime of the project, starting from the date of commissioning of the first phase of the project.
In the case of private lands, the land aggregating agency will have to pay ₹25,000 (~$335)/acre annually for the entire lease period with an escalation of 5% every two years.
If the park is developed by the park developer, project developers will have to pay ₹500,000 (~$6,700)/acre to the park developer towards the Local Area Development Fund (LADF). Park infrastructure development charges would also be applicable as per the Detailed Project Report (DPR) estimates after deducting Central Financial Assistance (CFA), if applicable.
External Evacuation Infrastructure:
The state provided developers with two options to set up evacuation infrastructure for the projects. The first option allowed developers to connect to the state transmission utility (STU) by laying a line to the STU grid substation at their own cost and transferring it to the Andhra Pradesh Transmission Company (APTRANSCO). Alternatively, they can pay APTRANSCO to do it.
The second option allowed developers to bear the entire cost of the external evacuation infrastructure, including the connecting line, grid substations, and upstream network up to the central transmission utility (CTU). This must, however, be constructed under the supervision of APTRANSCO and must be handed over to them before the project is commissioned.
All land, whether government or privately owned, transferred to the land aggregating agency, will be converted from agricultural-use land to non-agricultural land by the government before it is transferred. All the land leased from the land aggregating agency can also be used for non-agricultural purposes after a conversion fee, collected from developers, by the nodal agency.
These projects will also be exempted from having to obtain no-objection certificates (NOC) or consent from the state pollution control board.
New manufacturing facilities, equipment, and ancillaries related to renewable energy set up within the scope of the policy were also given incentives. These projects would be given priority when it comes to the allotment of land on a long-term basis. They will also be exempted from electricity duty for ten years. It noted that additional incentives would be provided as per the prevailing industrial promotion policies of the state government.
The NREDCAP will be the nodal agency under this policy and that it would be responsible for allocating solar or wind resources and granting permissions of a first-come-first-serve basis. It will also oversee coordination with the Ministry of New and Renewable Energy (MNRE), NTPC, Solar Energy Corporation of India, APTRANSCO, state DISCOMs, and other central or state agencies.
They will also facilitate the lease of land from the government land aggregating agency and act as park developers if required.
Recently, Mercom reported that the Andhra Pradesh cabinet approved the proposal to develop a 10 GW mega solar power project for the benefit of the farmers in the state. The project will supply nine hours of continuous power to the farmers during the daytime, besides establishing an Integrated Renewable Energy Project.
According to Mercom’s India Solar Project Tracker, Andhra Pradesh currently has installed solar PV capacity of ~3.6 GW and a project pipeline of 1.3 GW.
Nithin Thomas is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai. More articles from Nithin.