The Andhra Pradesh Electricity Regulatory Commission (APERC) has approved a tariff of ₹4.6 (~$0.0544)/kWh for the Southern Power Distribution Company of Andhra Pradesh (APSPDCL) to procure 400 MW from Axis Energy‘s wind-solar hybrid projects.

The Commission has ordered the distribution company to consider that the energy injected into the grid will be treated as banked energy. APSPSCL may purchase this energy at 50% of the pooled power purchase cost.

It approved the power purchase agreements (PPA) with the requested tariff of ₹4.6 (~$0.0544)/KWh.

Background

The petitioner, APSPDCL, sought to procure 100 MW of wind-solar hybrid power each from Axis Energy Ventures’ four solar parks under the 400 MW pilot project of the bundling, balancing, and banking program.

The program mandates a capacity utilization factor (CUF) of over 60%, a stable Andhra Pradesh Public Service Commission (APPC) tariff, and 50:50 renewable energy certificate benefit sharing and other local economic benefits.

The petitioner entered a power purchase agreement (PPA) with Axis Energy Venture’s four solar parks and approached the Commission to approve the PPAs.

APERC rejected the petitioner’s request, seeking further clarification.

The Commission sought justification for the petitioner’s procurement of 400 MW of wind-solar hybrid power and fixing a pooled power purchase cost for a 25-year PPA duration.

The petitioner submitted that wind-solar hybrid power will provide round-the-clock power to meet the state’s power needs and help the state meet its renewable purchase obligations (RPOs). It added that additional renewable energy projects are needed to achieve its 24% RPO target by 2026-27.

It also highlighted that hybrid projects would help achieve a higher CUF of above 60%, ensuring continuous power availability.

It added that procuring power projects after the interstate transmission system waiver ends would increase bids by ₹0.95 (~$0.011)/kWh to ₹1.28 (~$0.015)/kWh. The petitioner also said it would be economical for the state to procure from a project that only utilizes the state transmission utility network, such as this one.

However, the Transmission Corporation of Andhra Pradesh responded that it could not intermittently balance renewable energy or provide banking services. Accordingly, the Commission permitted the APSPDCL to file the amended PPA.

APSPDCL said the developer must ensure an energy storage system (ESS) and the power project.

It further requested that the Commission mandate the developer to provide peak hour supply for two hours each in the morning and the evening. The petitioner said that the developer must ensure 90% availability of the contract capacity during these peak hours.

Additionally, the petitioner requested the Commission to approve the APPC tariff applicable for 24 months from the date of approval of the draft PPAs approved in FY 2021-22. Referring to that approval, it requested the Commission to allow the tariff of ₹4.6 (~$0.0544)/kWh instead of ₹5.12 (~$0.06)/kWh per the current APPC tariff.

Axis Energy Ventures also proposed the following changes to the PPA:

• Provision of firm power for two hours during morning and evening peak hours by installing ESS. Axis Energy will ensure 90% availability of contracted capacity.
• The company will maintain a 500 MW power evacuation capacity with delivered energy calculated based on the contracted capacity.
• If generated power exceeds 500 MW, the petitioner has the right of first refusal. The excess power can then be sold to third parties or power exchanges.
• Use of existing infrastructure for charging and delivering power from energy storage systems without additional charges
• Provision to allow a one-time change in the renewable energy configuration until the commercial date of operation
• Proposal for a more granular penalty structure for not meeting the 60% CUF
• Application of late payment surcharge
• Clarification on the calculation of delivered energy
• Acceptance of APPC tariff determined for FY 2021-22 for 25 years

Commission’s Analysis

The Commission recognized the petitioner’s need to procure power from wind-solar hybrid power projects to meet growing power demand, grid stability, and RPO targets.

The regulator changed the peak hours to 5 AM, 9 AM, and 7 PM to 11 PM, stating that peak hour demand shifts are expected due to the large-scale adoption of solar.

It approved the PPAs with the requested tariff of ₹4.6 (~$0.0544)/KWh, which is also lower than the tariff discovered in a Solar Energy Corporation of India’s 1.2 GW wind-solar hybrid auction.

Recently, APERC waived application fees and net metering charges for domestic consumers installing rooftop solar systems of up to 10 kW under the Pradhan Mantri Surya Ghar: Muft Bijli Yojana.

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