Axis Energy Gets APERC Nod For 400 MW Hybrid Projects In Andhra

The Andhra Pradesh Electricity Regulatory Commission (APERC) has issued an order regarding the approval of four amended power purchase agreements (PPAs) between the Southern Power Distribution Company of Andhra Pradesh Limited (APSPDCL) and Axis Renewable Energy Park entities for procuring a total of 400 MW from wind-solar hybrid projects. The agreements were executed under the Bundling, Balancing, and Banking (BBB) scheme, aligning with the state’s renewable energy commitments. The ruling will come as a shot in the arm for Hyderabad based Axis Energy, which has been waiting on it.

Background

Public Consultations

After public consultations, objections were raised regarding the feasibility of the BBB scheme due to the absence of gas-based power plants for energy balancing in the state. Stakeholders questioned the relevance of outdated policies underpinning the agreements, arguing that competitive bidding would ensure lower tariffs. Concerns were raised over potential financial burdens on consumers, tariff structures favoring developers, and challenges in banking surplus power.

In response, APSPDCL defended its decision, citing legal processes and the necessity of honoring prior commitments. APSPDCL proposed mandating energy storage technologies to ensure peak-hour supply and argued that competitive bidding does not always guarantee lower tariffs. The developer, Axis Energy Ventures India Private Limited (AEVIPL), agreed to modifications in the PPAs, including provisions for firm power during peak hours and adjustments to energy storage infrastructure. APERC use a reference to recent FDRE tenders to establish that the price agreed to with Axis Energy was not uncompetitive in fact. SECI projects worth a total of 600 MWs were considered with winning price ranging from Rs 4.64 to Rs 4.72 per unit to establish that the proposed tariff of Rs 4.60 was not out of the acceptable range at all.

Interestingly, APERC also contended that the proposed tariff of Rs. 4.60/kWh for these projects is lower than the rate of Rs. 5.12/kWh originally proposed. It is also anticipated to be considerably lower than the APPC rate that will be in effect when these projects are commissioned. While the APPC rate under the ‘Pooled Cost Power Purchase’ mechanism will continue to increase every year due to the rising cost of power purchases, particularly from thermal stations, the bench cited the fixed nature of the costs in this case.

Ultimately, APERC’s ruling ensures the continuation of the project while addressing stakeholder concerns.