Andhra Pradesh Issues New Wind Policy with Various Incentives to Attract Developers

Policy allows 100% banking of wind energy

January 9, 2019


Andhra Pradesh has announced Wind Power Policy-2018 with a goal to expand the base of wind projects in the state.

This policy will remain applicable for a period of five years and will be in force until a new policy is issued. Wind power projects that are commissioned during the operative period will be eligible for the incentives declared under this policy for a period of 10 years from the date of commissioning.

There will be three categories of wind power projects:

Category I: Projects set up in government or revenue lands, forest areas or private lands selling power within the state or outside the state

Category II: Captive use or direct sale to third-party within or outside the state; and

Category III: Projects under renewable energy certificate (REC) mechanism

Key Policy Highlights

  • New & Renewable Energy Development Corporation of Andhra Pradesh Ltd (NREDCAP) will be responsible for capacity allotment for up to 40 MWs and will recommend capacity allotment beyond 40 MWs to the government of Andhra Pradesh.
  • Wind power project developers will be encouraged to install higher capacity and improved technology wind electric generators (WEGs) by undertaking appropriate micro-siting studies in order to optimally utilize the available wind resource potential at the project sites.
  • There will be no transmission and distribution charges for wheeling of power generated from wind power projects to the nearest central transmission utility (CTU) via state transmission utility (STU) network for inter-state wheeling of power.
  • Banking of 100 percent of energy will be permitted during all 12 months of the year, based on the feasibility and prior approval of DISCOMs. Banking charges will be adjusted in kind at the rate of 5 percent of the energy delivered at the point of evacuation. The banking year will be from April to March.
  • Withdrawals from banked energy will not be permitted during five-month period from April 1 to June 30 and February 1 to March 31, of each financial year.
  • Unutilized banked energy will be considered as deemed purchase by DISCOMs at 50 percent of the APPC. Payment for the deemed purchase of un-utilized banked energy will be capped to 10 percent of the total banked energy during the applicable year.
  • Intra-state open access clearance for the whole tenure of the project will be granted as per the APERC regulations. In absence of any response from the nodal agency to the generator within 21 days, such application will be deemed open access.
  • Reactive power charges of ₹25 (~$0.003) per kVARh will be levied on wind energy generators, who draw reactive power up to 10 percent of the net active energy generated. Anyone drawing in excess of 10 percent of the net active energy generated will be liable to pay ₹0.5 (~$0.007)per kVARh (reactive power).
  • Generation of electricity from wind projects will be treated as eligible industry under the programs administered by the industries department, and incentives available to industrial units under such programs will be available to the wind power producers.
  • Must-run status has been accorded to wind projects.

Considering the good wind power potential in Andhra Pradesh, coupled with the capacity addition achieved so far and falling wind power tariffs, there was a dire need for a policy to further the growth of wind sector in the state.

Recently, Andhra Pradesh government also issued Andhra Pradesh Solar Power Policy 2018 targeting 5 GW of solar in the next five years.