The National Solar Energy Foundation of India (NSEFI) has written a letter to the Minister of Power R.K. Singh, requesting for his immediate intervention in the curtailment of renewable energy projects in Andhra Pradesh despite the “must-run” status accorded to them.
The letter comes in the wake of the ongoing feud between the Andhra Pradesh government and solar and wind project developers.
Subrahmanyam Pulipaka, the chief executive officer of NSEFI writes, “We request you to take up the matter on urgent basis as backing down almost 7,000 MW of wind and solar projects is an illegal action by the state instrumentalities resulting in national loss and impacting the sustainability of these projects liable to make them non-performing assets with considerable loss to developers and investors. We are also seeing cancelation of bid projects.”
Pulipaka fears that the recent actions of the Andhra Pradesh government and curtailment in some other states coupled with delayed payments are dealing a blow to investor sentiment. The risk of investing in renewable energy projects is now becoming unacceptably high, he noted.
“As you are aware, the Andhra Pradesh government had initiated certain illegal actions seeking renegotiation of wind and solar tariffs for projects deployed across the state, for which the IPPs has sought a stay from the Andhra Pradesh High Court. As the stay is in place, and the state cannot take any actions on revising tariff, the state instrumentalities are taking other coercive actions that are impacting the IPPs and sector interests,” states the letter.
According to Pulipaka, “A significant adverse action being undertaken by the state instrumentalities is rampant backing down of both wind and solar power by the Andhra Pradesh State Load Despatch Centre (APSLDC). As you are aware, wind and solar power projects have been accorded a ‘must-run’ status under the applicable laws. Despite the must-run status accorded to such projects, our member companies were being subjected to curtailment on a regular basis through verbal instruction issued by APSLDC.”
Last week, Mercom spoke to a few wind developers operating in the state who confirmed the ongoing curtailment of wind power. “Currently, during peak hours, 90-100% curtailment is happening, and on average daily, they are curtailing 60-70%. Even though the renewables have ‘Must-Run’ status, all the independent power producers are facing the same issue. This is a critical condition, this being the windy season,” one of them had said.
Despite the court’s stay order on the proceedings, the Andhra Pradesh South Power Distribution Company Limited (APSPDCL) has also filed a memo with the Andhra Pradesh State Electricity Regulatory Commission (APSERC) to cancel the 21 wind power purchase agreements (PPAs).
These developments come on the heels of state’s new chief minister Jaganmohan Reddy’s newly-formed committee to deliberate and bring down the costs in all the high-priced Power Purchase Agreements for wind and solar power projects signed during the term of the previous Chandrababu Naidu-led government, alleging corruption.
Following the state’s surprise move, the Power Minister wrote to the chief minister asking him to exercise restraint in the matter to not hurt investor interests in the state. However, the state has gone ahead with its decision, making the developers seek legal support. Later, Singh also penned down his apprehensions about the proceedings in a letter to Home Minister Amit Shah.
NSEFI has suggested that APSLDC should avoid curtailment of solar energy projects “to uphold the word and spirit of the law”, constitute a committee of experts to monitor the grid condition in Andhra Pradesh on a daily basis, advise the POSOCO (Power System Operation Corporation Limited), NLDC (National Load Despatch Centre), and SRLDC (Southern Regional Load Despatch Centre) to make the state grid and generation project data available upon request.
Anjana is a news editor at Mercom India. Before joining Mercom, she held roles of senior editor, district correspondent, and sub-editor for The Times of India, Biospectrum and The Sunday Guardian. Before that, she worked at the Deccan Herald and the Asianlite as chief sub-editor and news editor. She has also contributed to The Quint, Hindustan Times, The New Indian Express, Reader’s Digest (UK edition), IndiaSe (Singapore-based magazine) and Asiaville. Anjana holds a Master’s degree in Geography from North Bengal University, and a diploma in mass communication and journalism from Guru Ghasidas University, Bhopal.