Andhra Pradesh Amends its Solar, Wind and Hybrid Policy – Pulls Back Incentives

Energy banking facility has been withdrawn from the existing renewable energy policies

thumbnail

The government of Andhra Pradesh has issued a notification amending the state’s policy for wind, solar, and wind-solar hybrid projects, taking away some vital incentives from the renewable generators.

The amendments have changed or canceled many existing provisions in these policies that deal with transmission charges, energy banking, and tariff determination.

Transmission and distribution charges for wheeling of power

As per the latest amendment, transmission and distribution charges will be determined by the Andhra Pradesh Electricity Regulatory Commission (APERC) for connectivity to the nearest central transmission utility (CTU) through the state transmission utility (STU) network for the inter-state wheeling of power, and only through the STU for intra-state wheeling of power.

Also, the amendments go on to delete the relevant provisions in the solar and wind policies that state that these projects will be exempted from paying the supervision charges to distribution companies (DISCOMs) only in case of transmission of power from the STU to CTU.

The exemption of transmission and distribution charges for inter-state wheeling of power to the nearest  CTU through the STU network for solar and wind projects, as provided in its 2018 policies, will stand amended. Further, for wind-solar hybrid projects, the transmission and distribution charges were exempted up to 50% of the applicable charges for wheeling of power within the state according to the 2018 policy. This has now been amended also.

Energy Banking

The amendments also state that the facility of energy banking and drawal of power given to generators will be withdrawn for solar, wind, and hybrid projects. Further, any injection of energy between synchronization and declaration of the commercial operation date (COD) will be treated as inadvertent power, and no cost will be paid for it by the state DISCOMS.

With this amendment, banking of 100% of energy, which was allowed throughout the year based on the feasibility and prior approval for solar, wind, and hybrid projects earlier, is deleted.

Tariff

The policy now also states that the tariffs for these renewable energy projects or any other variable renewable energy project will not exceed “the difference between pooled variable cost and balancing cost.” For rooftop solar projects, the applicable tariff for net metering or gross metering should not exceed “the difference of pooled variable cost and balancing cost” (or) the applicable tariff at the time of COD (whichever is less).

The APERC will be the authority that will be responsible for setting the pooled variable cost and balancing cost every year.

This will amend the provision in the solar policy 2018, which stated that the state would procure around 2,000 MW of solar in five years, signing PPAs for 25 years at the tariff determined in competitive bidding for large-scale solar projects. For rooftop solar projects, the tariff would be equal to the average pooled power purchase cost, which will be determined by APERC, and the PPA would also be for 25 years. The wind policy 2018 which stated that the tariffs would be determined through competitive bidding with PPAs for 25 years, will also stand amended.

Land

Lastly, the amendment mandates that the procurement of government land for the development of solar, wind, and hybrid projects can only be done on a lease-hold basis.

The solar and wind policy 2018 which stated that the District   Collector  would hand over advance   possession of land to Non-conventional Energy Development Corporation of Andhra Pradesh Limited (NREDCAP) which would in  turn  enter  into  lease  agreement  with  the  developer  collecting lease rentals for 25 years at 10% of the value of land with 10% increase every five years from the date of commissioning of the project, now stands amended.

The amendments, which take away many incentives from renewable energy generators, have been issued to strengthen the financial position of state DISCOMs, according to the Andhra government.

Andhra Pradesh had announced its wind-solar hybrid policy In January 2019.

Around the same time, the state came up with its new solar policy to promote widespread usage of solar power and targeted a minimum total solar power capacity addition of 5,000 MW in the next five years in the state.

Earlier this year, the state’s new chief minister Jaganmohan Reddy had announced forming a high-level negotiation 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 Chandrababu Naidu-led government.

Reddy had ordered a slew of measures for the sector, starting with the issuance of recovery notices to all solar and wind power developers of the state that had entered the PPAs. The notices were served for the alleged losses caused to the state DISCOMs and the government due to the higher tariffs quoted in these PPAs.

Power Minister R.K. Singh has urged Jaganmohan Reddy not to revisit power purchase agreements (PPA) for solar and wind projects in the state. In a letter, Singh had asked Reddy to act in a manner that is fair, transparent, and according to the law. “The investment and development processes will grind to a halt, warned Singh through his letter.

Andhra Pradesh has become one of the unfriendliest states for renewable companies since the elections. With these new amendments, investments into renewables in the state will most likely come to a standstill.

Image credit: Optimal Power Solutions

RELATED POSTS

thumbnail
Top 5 States for Open Access Solar Installations in CY 2022

India added an impressive 2.5 GW open access solar capacity in 2022, registering a growth of 92% year-over-year (YoY), according to the 2022 Q4 & Annual Mercom India Solar Open Access Market Report. Karnataka emerged as the to...

March 23, 2023

Markets & Policy

Government Clarifies ALMM Enlistment Guidelines for Co-branded Solar Modules

The Ministry of New and Renewable Energy (MNRE) has modified the Approved List of Models and Manufacturers (ALMM) guidelines and provided exceptions to broaden the qualification criteria for modules produced under agreements betwe...

March 24, 2023

C&I

In Bengaluru, a 100 kW Solar System Can Save C&I Entities ₹1 Million Annually

Mercom India successfully concluded the C&I Clean Energy Meet 2023 in Bengaluru, where stakeholders in the solar sector and commercial and industrial entities converged to enthusiastically discuss the benefits of renewable ene...

March 24, 2023

Other

Gensol Acquires Solar Tracker Maker Scorpius for ₹1.35 Billion

Gensol Engineering, a part of solar engineering, procurement, and construction (EPC) company Gensol Group, has acquired India-based solar tracker manufacturer Scorpius Trackers for ₹1.35 billion ($16.4 million). Gensol said the ac...

March 23, 2023

Magazine

DON'T MISS AN ISSUE!

Mercom Cleantech Magazine

Get Your Copy Today!

magazines

Latest News

thumbnail
Government Clarifies ALMM Enlistment Guidelines for Co-branded Solar Modules

The Ministry of New and Renewable Energy (MNRE) has modified the Approved List of Models and Manufacturers (ALMM) guidelines and provided exceptions to broaden the qualification criteria for modules produced under agreements...

March 24, 2023

thumbnail
Intra-State Sections of Evacuation Infrastructure for Renewables Delayed

The Ministry of New and Renewable Energy (MNRE) told the Parliamentary Standing Committee on Energy that the intra-state stretches of the Green Energy Corridor (GEC) have been delayed due to various reasons, including...

March 24, 2023

thumbnail
EnBW Takes €2.4 Billion Final Investment Decision on Offshore Wind Project

German electric utility company Energie Baden-Wuerttemberg (EnBW) has made its final €2.4 billion (~$2.6 billion) investment decision on He Dreiht, a major wind project in the German North Sea. The project has a capacity of 960...

March 24, 2023

thumbnail
India Missed 2022 Renewables Target as Rooftop Solar and Wind fell Short

The Parliamentary Standing Committee on Energy report has isolated underwhelming progress on rooftop solar and wind energy projects as the primary reason for India falling short of achieving its renewable energy capacity target...

March 24, 2023

thumbnail
Researchers Aim to Accelerate Delivery of Space-Based Solar Power to Earth

Researchers at Northumbria University are studying ways of producing wireless electricity from space to Earth by harvesting the Sun’s energy. U.S.-based aerospace, defense, and information security organization Lockheed Martin...

March 24, 2023

thumbnail
Regulator Directs Wind Energy Firm, MSEDCL, to Recompute Delayed Payment Charge

The Maharashtra Electricity Regulatory Commission (MERC) recently directed Hindustan Petroleum Corporation (HPCL) and the Maharashtra State Electricity Distribution Company (MSEDCL) to recompute the delayed payment charge from...

March 24, 2023

thumbnail
One-Step Coating Could Make Perovskite Solar Cells Commercially Viable

The National Renewable Energy Laboratory (NREL) has devised a new way to produce perovskite solar cells that could speed its commercialization. Different layers are typically added sequentially to a conductive glass substrate to...

March 24, 2023

thumbnail
ACWA Power to Develop Solar and Energy Storage Projects in Uzbekistan

Saudi Arabia-based energy company ACWA Power has signed power purchase and investment agreements with  National Electric Grid of Uzbekistan, and the Ministry of Investment, Industry, and Trade to develop new solar and battery...

March 24, 2023

thumbnail
China Securities Regulatory Commission Approves Canadian Solar’s IPO

The China Securities Regulatory Commission has approved the registration of CSI Solar, the engineering, procurement, and construction arm of solar module maker Canadian Solar, to issue an initial public offering (IPO). The...

March 24, 2023

thumbnail
Renewables Accounted for 83% of the Total Generation Capacity Added in 2022

Renewable capacity grew by 9.6% in 2022, adding a record 295 GW worldwide. This accounts for 83% of all power capacity added last year and brings the global renewable generation capacity to 3,372 GW by the end of last year, a...

March 24, 2023

MORE NEWS