Andhra Govt Finally Withdraws 6400 MW Tender, Sticks With Buy From SECI

In a move that was widely expected for the past few months, the Andhra Pradesh government has dropped its  6400 MW solar tender. the state government had tried to pull off its own tender with conditions separate from central tenders, to prove a point about its claim of paying too high a price for previous tenders. Even as its efforts to renegotiate those tariffs continue in the supreme court where its actions have been challenged,  its own tender was stayed by the High court, effectively on grounds of illegality. Even in the Supreme Court, the odds are against the state government getting a reprieve, considering the clear logic and view shared by the APTEL bench while throwing out its efforts to renegotiate tariffs.

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The June 17 order that had quashed the tender had said that invitations for bids for renewable energy projects must comply with the Centre’s guidelines. Interestingly, even when quoting the tender pipeline for solar projects, Power and MNRE Minister R.K. Singh was not really counting the 6.4 GW tender of the Andhra government at any stage, making the centre's stand on the issue very clear.

The order was passed on a petition filed in January by renewable energy companies, notably Tata Power, which had argued that the tender process had violated norms.

By agreeing to buy power through SECI at Rs 2.49 per unit (plus SECI's 7 paise trading margin), the state government submitted to the high court that it will be withdrawing its appeal against its order.

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Started by APGECL, the nodal agency created by the Andhra government to manage the tender and its renewable plans, the tender was floated  on November 31 last year, for 10 solar power plants to produce 6,400 Mw exclusively for agricultural use.

Adani Green Energy, along with Torrent Power and others had emerged as a major bid winner, at prices ranging around Rs 2.47-2.48 per unit.

Andhra's SECI buy has also given a fillip to SECI's own languishing 12 GW manufacturing linked tender, which finally has enough commitments and PSA's in place for it sign its own PPA with the two winners there, Adani Green energy again, besides Azure Power. As it turns out, both the bid winners have also had to take a markdown on their winning bids to get the process moving along.