The Andhra Pradesh State Load Dispatch Center (APSLDC) has filed a review petition before the state’s high court against Power System Operation Corporation Limited’s (POSOCO) appointment to look into the reasons behind the curtailment of renewable energy in the state, due to it being an independent central agency.

The state high court in its order dated January 27, 2020, had asked the Power System Operation Limited to investigate the reasons behind the curtailment of renewable power in Andhra Pradesh, as reported earlier by Mercom.

According to APSLDC, on January 28, 2020, Power System Operation Limited approached the Central Electricity Regulatory Commission (CERC) about the power curtailment issue in Andhra “espousing the cause of renewable energy generators and for the implementation of the ‘must-run’ status.”

APSLDC has also alleged that POSOCO has adopted an “adversarial stand” in the petition filed by it before the Central Electricity Authority (CEA). It also argued that since APSLDC was no part of the petition and couldn’t produce the affidavit before the court, the order needs to be reviewed.

The state SLDC has alleged that POSOCO has projected and aligned itself with the generators and has been biased towards the generators. It added that POSOCO and CEA came under the influence of the power generators who are the earlier petitioners while taking its stand.

Defending its stance, the APSLDC in its petition further stated that it is incorrect to say that it is responsible for the curtailment of wind generation despite there being no threat to grid security and that the APSLDC has failed to implement an efficient management system to manage power projects.

In January 2020, the petitioners had pointed out that the curtailment was due to the higher tariffs in the agreement, while the APSLDC argued that the curtailment was due to grid security.

In the review petition, however, the APSLDC argues that the curtailment is done to maintain the grid safety and that the actions are within the law as provided in the Electricity Act 2003.

Now, it remains to be seen how the issue of curtailment that has become a cause of concern for developers, is decided by the court.

Background

Solar and wind developers including the special purpose vehicles of Mytrah Energy, a renewable energy independent power producer (IPP). Walwhan Renewable Energy (formerly Welspun Renewable Energy), ACME Solar Holdings and its subsidiary had gone to court against Andhra Pradesh DISCOMs’ inability to pay the dues and resorting to the curtailment of power from the projects. While the developers argued that the curtailment was due to commercial reasons, the DISCOMs said that it was to guarantee grid security.

So, the court had asked POSOCO, an independent central agency, to find out the reason behind the power curtailment by APSLDC and submit a report.

The court had directed the developers and DISCOMs to submit their claims to POSOCO within a week supported by documents. APSLDC has been given a week to file its objections on the claim.

History behind the case

In July 2019, the Andhra Pradesh government had decided to revisit the PPAs of renewable energy projects against which renewable energy project developers managed to get a stay order on the revision of PPAs. However, even after the stay order, the state began severely curtailing wind power. The Amaravati High Court later issued an order asking the state load dispatch center (SLDC) and the state’s transmission company (APTRANSCO) to stop the curtailment of power from solar and wind energy projects.

Considering the situation of the DISCOMs in the state, the Amravati High Court in December 2019, directed the state DISCOMs to immediately clear the dues of solar and wind developers within a month. According to the court’s order, the DISCOMs were directed to pay ₹2.43 (~$0.0341)/kWh and ₹2.44 (~$0.0343)/kWh to wind and solar developers, respectively. The DISCOMs then submitted an affidavit to make the payment within four weeks from December 20, 2019. Mercom has also reported that solar and wind power developers in the state are beginning to receive part of their dues in batches.

The issues in Andhra Pradesh continue to dent investor sentiment in the state and the sector. The longer the litigation drags on in the state, the harder it will become for the industry to get back on the growth path.

 

Image credit: Invenergy