The Power purchase agreement (PPA) for the 250 MW grid-connected solar photovoltaic (PV) project to be developed in Kadapa Solar Park will be signed soon.

An Andhra Pradesh State Power Distribution Company Limited (APSPDCL) official told Mercom, “There have been some positive developments in the past week. The National Thermal Power Corporation (NTPC) and the state energy department negotiated, soon the power sale agreement (PSA) between NTPC and Andhra Pradesh distribution companies (DISCOMs) will be signed.”

“We’ve reached an agreement with NTPC to buy power from its proposed 250 MW project at Kadapa provided it is bundled with 125 MW capacity of thermal power so that the tariff is lower than the ₹3.15 (~$0.0487)/kWh NTPC had initially proposed,” said Ajay Jain, principal secretary for energy in Andhra Pradesh, according to an Economic Times report.

When contacted an NTPC official aware of the development said, “Yes, the PPA will be signed, but NTPC will be at a loss, we will pay the developer tariff at which the bid was won, and we will supply same power to AP at a lower tariff. Sometimes to push for renewable energy, these minor losses have to be incurred.”

Back in April 2017, Solairedirect won the 250 MW project at a reverse auction by quoting a tariff of ₹3.15 (~$0.0487)/kWh under NSM Phase-II, Batch 2, which was the lowest quoted tariff at that time. The signing of the agreement was hindered by the DISCOMs reluctance. APSPDCL cited a surplus power situation in the state as its reason for not finalizing the PSA with NTPC at the quoted ₹3.15 (~$0.0487)/kWh tariff, putting development of the 250 MW solar power project in jeopardy.

Seven months have elapsed since the auction was completed, and the construction work for this project has not yet begun.

The update comes in the light of recent development from the MNRE, which amended the guidelines for 3,000 MW state specific bundling program, facilitating the sale of power from host state to another state.

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