Andhra Pradesh’s 6400 MW Solar Bid Challenged By Tata Power

Tata Power Renewable Energy has managed to get a stay from the Andhra Pradesh High Court on the massive 6,400 MW ultra mega solar project. The project was being projected by the state government  as a clear sign of its recovery from the disputes it created with developers and its ability to draw investor interest despite those issues. The state government has a stated target of 10,000 MW of Solar parks for now.

The disputes with multiple wind and solar developers in Andhra have been festering since 2018, when the new state government first sought to renegotiate PPA’s signed during the previous government, compounding it further by delaying payments to generators. This has been met with tiff opposition from generators, as well as the MNRE, which has specifically quoted the Andhra example to tighten up contract provisions and make changes in the proposed electricity act to prevent recurrence.

The Andhra Pradesh High Court has now directed the state not to enter into any agreements for the mega solar park, until the next hearing on February 15. At issue is the legal validity of the state government move to shift jurisdiction over these fresh projects to itself, rather than the Andhra Electricity regulator.

It’s a valid contention, as allowing Andhra to do it will simply open the floodgates for other states to follow its lead. So the state government certainly cannot expect any support from the centre on this issue, it seems, especially at a time when the centre has been keen to streamline the rules and regulations around the process.

Having said that, it would have been very interesting to see the prices quoted by developers  in these bids, as the whole issue for the state government was apparently the need to get lower prices. To ensure that happens and it doesn’t lose face, observers expected it to design its new RFS and bidding with special incentives to get lower prices. The bids were to be followed by reverse auctions among the bidders.

The AP plans for the 6400 MW projects are being fronted by a special firm the state government has set up, called the Andhra Pradesh Green Energy Development Corporation (APGEDCL). A key objective is to provide farmers with 9 hours o uninterrupted power supply in the day time. That makes these  solar bids probably one of the last few that are plain vanilla solar parks, with no storage or other components.