Even with Court’s Stay Order in Place, Andhra Pradesh to Cancel 21 Wind PPAs

The ongoing feud between solar and wind project developers and the government of Andhra Pradesh (AP) has escalated further, and the state has now decided to withdraw the power purchase agreements (PPAs) with 21 wind power projects worth 776.9 MW.

Andhra Pradesh South Power Distribution Company Limited (APSPDCL) has filed a memo with the Andhra Pradesh State Electricity Regulatory Commission (APSERC) to cancel the 21 wind PPAs.

“In view of the precarious financial position of AP DISCOMs and consequent inability to bear the additional financial burden involved in purchasing power from 21 wind developers, AP DISCOMs have decided to withdraw the PPAs entered with various wind power projects clients of Suzlon and Axis Energy Ventures and that since the PPAs are not yet approved, the same is not enforceable, and the APSPDCL is at liberty to withdraw the same,” the memo to Andhra Pradesh Electricity Regulatory Commission, states.

The withdrawal of 21 wind power purchase agreement comes despite the stay order from the high court.

“The matter is posted for the continuation of the arguments to 01-08-2019 and that the hearing of the matter may be deferred under the circumstances.  Hence, the matter is posted to 24-08-2019,” states the memo.

Recently, the Amaravathi High Court imposed a stay order on the implementation of the state DISCOM’s letter seeking a revision in the power purchase agreement for the solar PV and wind projects.  The stay will be in place until August 22, 2019, after which the court will hear the matter.

On July 1, 2019, the Andhra Pradesh government announced that it was going to review the PPAs signed between the Andhra Pradesh South Power Distribution Company Limited and power generators to renegotiate tariffs. Ever since the announcement, Andhra Pradesh is going through a tussle between the developers of renewable energy projects and the newly-formed state government.

Chief minister Jaggan Mohanreddy-led government had said it would cancel the PPAs for wind and solar projects signed by the previous government which was led by Chandrababu Naidu, alleging corruption.

According to Reddy, the PPAs signed earlier were higher than the tariffs levied across the country at that time.

Previously, Mercom reported that the nine renewable energy project developers approached the court in the matter: Renew Power, Azure Power, ACME Solar, Axis Wind Farms, Khandke Wind Energy, Vena Energy Power, Ecoren Energy, Vayu Urja Bharat and Waneep Solar (special purpose vehicles of Hero Future Energies).

Meanwhile, R.K.Singh has sent a letter to Union Home Minister Amit Shah to apprise him about the dire situation in the state.

Last week, Mercom reported that  Andhra Pradesh government’s decision to renegotiate solar and wind PPAs would set a bad precedent as developers and investors.