Lack of clarity on part of government may deflate solar power dreams in state

Published: 06th May 2013 11:57 AM  |   Last Updated: 06th May 2013 11:57 AM   |  A+A-

The ambitious Solar Power Policy notwithstanding, the State might get only 30-40 MW at the end of the day, as against its target of 1,160 MW of solar power.

The reason: lack of clarity on the part of the government and power distribution companies vis-a-vis rules and regulations pertaining to solar power purchase and fixation of tariff.

After announcing its Solar Power Policy, to be in tune with other states adopting solar power as a long-term investment, the State Government had invited bids sub-station wise to set up solar power stations with a total capacity of 1,160 MW. However, at the last minute, the government decided to have a benchmark tariff of `6.49 per unit, which is not acceptable to a majority of the bidders.

In all, 331 bidders, including some big names, came forward and the average of all L1 prices received in bidding was a little more than `8 per unit, while the tariff fixed by the government is `6.49 per unit, though it is the APERC, which has the final say in fixing the tariff. In fact, the State Government’s proposed price for buying solar power is much less than that announced by the Central Electricity Regulatory Commission (CERC) in February, which was `8.75 per unit. “What was said prior to tender process and what is being said later are not same. Lack of clarity will not help in realising the potential of solar energy in the state,’’ observes Thioltham R Kolanu, general secretary of AP Solar Power Association (APSPA).

The Andhra Pradesh Government justifies the benchmark price, stating it is more or less the same in Tamil Nadu, Rajasthan and otherstates. But the APSA argues that Tamil Nadu’s price of `6.48 per unit is not accurate as there is an escalation clause of 5 percent year on year, which converts to a levelised tariff of more than `8 per unit over the 20-year PPA (Power Purchase Agreement) period. It also claims Rajasthan, which fixed a price of `6.45 per unit, does not consider land provided by the state agency and next door evacuation facility, which eliminates line losses. Besides, radiation of at least 10 to 20 percent in Rajasthan is less than in AP, where rainfall is fairly higher.


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