The Andhra Pradesh government has agreed to procure 9 GW of solar power from the Solar Energy Corporation of India (SECI). SECI will supply power to the state’s agriculture sector for the next 30 years.

According to PTI, the state cabinet presided over by Chief Minister YS Jagan Mohan Reddy approved the SECI proposal.

SECI had written to the Andhra Pradesh government asking to procure 9 GW of solar capacity to be set up in the years 2024, 2025, and 2026 in three tranches of 3 GW each. The tariff quoted is ₹2.49 (~$0.034)/kWh, including SECI’s trading margin.

The 9 GW offered is part of the manufacturing linked solar projects auctioned in January last year. Adani and Azure both won the bid to develop 2,000 MW of projects with 500 MW of manufacturing capacity in the auction. The winning tariff quoted by both the companies was ₹2.92 (~$0.04)/kWh.

The tender also had a greenshoe option, where the companies could opt for an additional capacity to develop and manufacture. Under the option, Adani had offered a solar cell and module manufacturing capacity of 1,500 MW and 6 GW of generation. Azure added 500 MW manufacturing and 2 GW generation.

Recently, Mercom reported that SECI signed a power sale agreement for 500 MW with Grid Corporation of Odisha (GRIDCO). The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) agreed to procure 1 GW. Both the states have decided to purchase power at ₹2.61 (~$0.035)/kWh  – ₹2.54 (~$0.034)/kWh plus a trading margin of ₹0.07 (~$0.0009)/kWh.

But now it remains to be seen what happens to the Andhra government’s proposal to develop 10 GW of solar power projects to supply free power to farmers in the state.

The government had invited bids for 6.4 GW of solar projects, which was also oversubscribed. The state agency received requests for 14.9 GW of solar projects from five bidders – Shirdi Sai Electricals, Adani Group, Torrent Power, NTPC, and HES-SSISPL.

But the bid ran into legal complications. The Andhra Pradesh High Court had upheld a petition filed by Tata Power Energy Limited and quashed the request for selection and the draft power purchase agreements. Later, a larger bench headed by the Andhra Pradesh Chief Justice suspended the order issued by the single-judge quashing bid.

If the Andhra Pradesh government signs a power sale agreement for the 9 GW, SECI will be crossing a major hurdle of selling the power from the manufacturing-linked solar project. The tariff of ₹2.92 (~$0.04)/kWh discovered in the auction was considered expensive by the DISCOMs.