Vijayawada: The state government has decided to review the power purchase agreements (PPAs), following sharp decline in the cost of power production. A high-level meeting, scheduled to be held later this week, would discuss elaborately as to how to go about on the PPAs. While a section of officials is of the view that the existing PPAs should be reviewed, top-level bureaucrats expressed opinion that review should confine to future procurement of power.
The Andhra Pradesh Southern Power Distribution Company (APSPDCL) has decided to renegotiate PPAs it had signed with 41 wind project developers. The PPAs were signed before India’s first wind power auction conducted by the Solar Energy Corporation of India (SECI), which saw the tariff drop to Rs 3.46/kWh. The state now wants to renegotiate these PPAs, which it had signed with 41 developers covering 832.4 MW of wind capacity, at a tariff of Rs 4.8/kWh.
Prior to the auction, the Andhra Pradesh Electricity Regulatory Commission (APERC) had set the feed-in tariff for wind power for 2016-17 at Rs 4.8/kWh. The southern discom signed PPAs with wind developers at the same tariff, most of which have since begun work on their projects. But the APSPDCL had reportedly requested APERC not to consider the PPAs still pending and return those to the discom without approval. Now, the Energy Secretary will hold a high-level meeting on August 8 with the HoDs of APSPDCL, APEPDCL, Transco and Genco at Amaravati to take a final call on the issue, which has been haunting the government since a long time.
The developers have already decided to knock the doors of the court of law, if the APSPDCL formally cancels the earlier PPAs. Orange Uravakonda Wind Power (100.8 MW), Ais Wind Energy (105 MW) and Axis Wind Farm (105 MW) are the developers with PPAs pending approval. When contacted about the ongoing developments, principal secretary (energy, I&I and CRDA) Mr Ajay Jain told this correspondent that the review would be confined only to the future procurement of power. However, APSPDCL CMD Mr H.Y. Dora is of the view that the existing PPAs also should be reviewed and revised, as the cost of power production has come down drastically.
