Respite for Developers as Andhra Commission Approves Tariff for 1.7 GW of Solar Projects
Renewable energy developers have been facing uncertainty concerning the timely adoption of tariffs which could pose a significant risk to their projects
October 18, 2019
In a respite for renewable developers in the state, the Andhra Pradesh Electricity Regulatory Authority (APERC) has approved the tariff for three solar park projects – 750 MW (Phase – II) Solar Park at NP Kunta, 750 MW Kadapa Ultra Mega Solar Park, and 250 MW Solar Power from Kadapa Solar Park under NSM Phase-II, Batch-II, Tranche-I.
These projects were auctioned by the National Thermal Power Corporation (NTPC) and Solar Energy Corporation of India (SECI). However, considering the recent attempts to renegotiate tariff by the state government, renewable energy developers were feeling jittery about the fate of these projects.
According to the order from the state commission, the Southern Power Distribution Company of Andhra Pradesh had requested for the approval of long-term power sale agreements (PSA) signed by the distribution companies (DISCOMs) in Andhra Pradesh with NTPC and SECI. These PSAs were to be approved by the state electricity commission but were being held up due to the public hearings in which objectors had raised concerns regarding the PPAs and PSAs.
In this case, Ayana Renewable, Sprng Energy, and SB Energy were the developers who had filed affidavits before the commission in August 2019 to dispense with the process of a public hearing and expedite the adoption of the tariff. The tariffs discovered for these projects ranged between ₹2.72 ($0.038)/kWh and ₹3.15 ($0.044)/kWh.
To the relief of the developers, the commission has now passed an order adopting the tariffs discovered through the competitive bidding process. The commission has also ordered NTPC, SECI, and Andhra Pradesh DISCOMs to respond to the amendments suggested by the objectors in the public hearing within two months. Based on this, the APERC will consider incorporating them into the PPAs and PSAs.
The renewable energy developers in the state of Andhra Pradesh have been going through tough times. The turmoil started since the newly-elected chief minister, Jaganmohan Reddy’s administration, decided to renegotiate PPAs for wind and solar power projects signed during the term of the previous government, alleging corruption.
Following the state’s surprise move, the power minister has written to the chief minister twice, asking him to exercise restraint in the matter and not hurt investor interests in the state. However, the state went ahead with its decision, making the developers seek legal support.
In August 2019, developers appealed to Appellate Tribunal for Electricity (APTEL) regarding solar projects in Andhra Pradesh. They expressed apprehension regarding the recent development in the renewable energy sector of Andhra Pradesh. Later in the month, APTEL provided relief to renewable energy generators in the state of Andhra Pradesh by directing the commission not to allow the state DISCOMs to withdraw the proceedings pending for approval/adoption of tariff pertaining to the competitive bidding process.
Image credit: EDF
Shaurya is a staff reporter at MercomIndia.com with experience working in the Indian solar energy industry for the past four years in various roles. Prior to joining Mercom, Shaurya worked with a renewable energy developer and a consulting company. Shaurya holds a Bachelors Degree in Business Management from Lancaster University in the United Kingdom.