Hyderabad High Court Stays APERC Order Which Cut Down Incentive for Wind Developers

APERC had ended generation-based incentive which was offered to wind energy generators

August 24, 2018


The Hyderabad High Court has issued a stay on the enforcement of an order issued by the Andhra Pradesh Electricity Regulatory Commission (APERC). The APERC order had curtailed the enforcement period of wind tariff order of 2015.

Previously, a generation-based incentive (GBI) was offered to wind energy generators at the rate of ₹0.50 (~$0.0072)/kWh of electricity fed into the grid for a minimum of 4 years and a maximum of 10 years with a cap of ₹10 million (~$145,603)/MW. Through the order, APERC had removed this GBI.

The Hyderabad High Court has now issued the stay order after listening to the plea of Orange Anantpur Wind Power Private Limited. Orange Wind Power had petitioned the court after APERC issued its order in July 2018.

Orange Wind had named APERC, the Ministry of New and Renewable Energy (MNRE), state government of Andhra Pradesh, and the two state-run distribution companies (DISCOMs) of Andhra Pradesh as respondents in its petition.

Per the order reviewed by Mercom, “The petitioner had requested the high court to suspend the order by APERC and direct the DISCOMs to release the GBI amount withheld after issue of order by APERC and to not withhold any future GBI payments.”

In response, the court has now imposed a stay on the APERC order and stated that the APERC order is without jurisdiction. The court, in its ruling, also observed that APERC had no jurisdiction to exercise the power of review in the way it did.

This stay order comes as a huge relief for wind power project developers. Wind tariffs are gradually declining in the country, making GBI an added incentive for the developers.

In December 2017, APERC had approved Power Purchase Agreements (PPAs) for 41 wind projects aggregating 841.32 MW.

Previously, APERC had set the benchmark tariff for wind power in Andhra Pradesh at ₹4.35 (~$0.067)/kWh with accelerated depreciation and ₹4.76 (~$0.073)/kWh without accelerated depreciation for FY 2017-18.