VIJAYAWADA: The judicial preview of Andhra Pradesh has “rejected” and found “untenable” certain objections — capacity addition when the state already has surplus generation, long-term Power Purchase Agreements (PPAs), fate of APGENCO units, and others — made in the case of 10,000 MW solar power plants proposed by the state government to meet the future demand of the subsidised agriculture power. Recommending rectification of certain “defects” in the tender documents and that other findings be considered, it permitted AP Green Energy Corporation Ltd (APGECL) to float the tenders.
Multiple objections were sent to the judicial preview regarding addition of capacity when the State already has surplus power. The objectors, who said it was “imperative” to establish the need for taking up the projects, argued that adding more capacity may burden the already burdened power sector. The project proponent responded saying that the 10,000 MW capacity was arrived after considering the projected growth in the agriculture consumption. The APGECL responded that it would take two-three years for commissioning the project.
“Considering historical compound annual growth rate (CAGR) of demand of 6-9 per cent annually, the demand increase in next 3 years could potentially be higher than proposed solar capacity of 10,000 MW, which is corresponding to about 15000 MU,” the government said.The annual agriculture consumption for existing 18.37 Lakh pumps is about 12,221 MU per year as approved by APERC for FY 2020-21 against the Discoms filing of 13,039 MU. The number of agricultural pump sets has been increasing by about 50,000 every year, resulting in increasing agricultural consumption over the coming years, the government said.
“Since the need is established and detailed in these findings on the background and justification....the objection is rejected as not tenable,” judge of judicial preview justice Dr B Siva Sankara Rao said in a common findings and recommendations on 10 solar power plants proposed in 10 locations in Prakasam and Rayalaseema districts with a capacity of 6,050 MW. Objections were also raised regarding the long term power purchase agreement (PPA) to be entered into with the solar power agencies. It may be recalled that it was initially proposed to have PPA for 25 years of tenure. But, on November 8, the government increased it to 30 years.
“Indiscriminately entering into long-term PPAs to purchase unwarranted power would lead to imposition of hefty avoidable burdens on the consumers of power, under-utilisation of generation capacities, especially of stations of AP Genco, and transmission capacities of AP Transco, debilitate the Discoms financially,” one of the objectors said, adding that if the trend is allowed to continue, high capacity APGENCO units, established with public money, would be shut down and power distribution will be privatised.
However, the State submitted that the low cost of solar generation compared to the increasing variable costs of thermal stations makes solar power a cost-efficient choice in terms of addressing agriculture demand in the long run. Solar tariffs discovered in various bids across the country are in the range of `2.43 - `3.02 per kWh, and hence procuring solar power would result in net savings to the state, tender issuing authority replied.
“The findings given supra covers for the objection...,” the judge said. He added that as such the question of surplus beyond requirement from the above does not arise even remotely with the low cost tariff proposed to lessen the burden on the State rather purchase from Discom at high price with existing generations.
One of the suggestions made by a stakeholder also included relocation of the plant proposed in Prakasam district to Rayalaseema as the irradiation in the former was lesser than the latter. However, the judge rejected the objection as the government’s policy decision was taken after taking up field studies on viability.The APGECL is expected to make changes to the tender documents and float them in a week or so.
Objections on surplus generation, PPAs ...
Key objections were on capacity addition when the state is already has surplus generation, long-term PPAs, fate of APGENCO
State said low cost of solar power makes it a cost-efficient choice
Since the need is established and detailed in these findings on the background and justification....the objection is rejected as not tenable,” judge of judicial preview said