Opposing PPA Reviews, Renewable Developers Move High Court Against Andhra DISCOM

There has been increased resistance against the state’s move to renegotiate tariffs with SECI, NTPC, Greenko already saying no to the proposal


After the state distribution company (DISCOM) issued letters to entities and developers to revise tariffs for solar and wind projects which already have power purchase and sale agreements (PPAs and PSAs) in place, the recipients of the letter have declined to comply.

So far, nine renewable energy project developers including ReNew Power, Azure Power, ACME Solar, Axis Wind Farms, Khandke Wind Energy, Vena Energy Power, Ecoren Energy, Vayu Urja Bharat and Waneep Solar (special purpose vehicles of Hero Future Energies) have approached the High Court of Andhra Pradesh at Amaravathi.

The move is to get relief from Andhra Pradesh Southern Power Distribution Company (APSPDCL)’s decision to revise the tariff for solar and wind power projects approved by the Andhra Pradesh Electricity Regulatory Commission (APERC). The state’s new chief minister Jaganmohan Reddy recently formed a committee to review all solar and wind power purchase agreements signed by the previous government, alleging corruption and asking the tariffs to be renegotiated. This has irked the renewable developers who fear their projects will soon turn unviable.

Mercom has reviewed nine writ petitions filed with the High Court of Andhra Pradesh at Amaravathi. These include projects won by ReNew Power in 2014. In 2014, ReNew Power had won the bid to develop 60 MW of grid-connected solar PV projects in an auction conducted in the state.

The petitions also include 50 MW of grid-connected solar PV projects for which Azure Power had entered a PPA with APSPDCL.

The letter sent by APSPDCL regarding a tariff revision will render these projects unviable, and therefore the developers have approached the High Court of Andhra Pradesh at Amaravathi in the hope of relief.

Renewable project developer Greenko has already had declined to abide by the letter circulated by APSPDCL.

Recently, on project developer Greenko’s request, the Appellate Tribunal for Electricity (APTEL) put a stay order on the implementation of APSPDCL’s letter seeking a revision in the PPA for a grid-connected solar PV project executed by SEI Green Flash Private Limited, SEI Aroshi and SEI Rain Coke, which are SPVs of Greenko.

After APSPDCL wrote to the Solar Energy Corporation of India (SECI) and the National Thermal Power Corporation (NTPC) asking for a revision of tariff in the PPA and PSA to ₹2.44 (~$0.036)/kWh, they refused to comply as well.

The  Ministry of New and Renewable Energy (MNRE) had earlier expressed its serious concerns over the state’s impending decision to renegotiate PPAs, which were not adhered to by the state.

In an in-depth analysis of the happenings of the state, Mercom looked at the issue from various viewpoints. Read about these perspectives here.