VIJAYAWADA: The State Cabinet has approved the proposal to enter into an agreement with Solar Energy Corporation of India (SECI) to procure 7,000 MW solar power for providing free nine-hour power to farmers. The agreement will be signed for supply of power at Rs 2.49 per unit for 25 years on a sustainable basis.The decision to procure power from SECI at Rs 2.49 per unit (inclusive of trading margin) for 25 years is estimated to bring the burden down on the state exchequer by Rs 4,000 crore per annum, said Information and Public Relation Minister Perni Venkataramaiah (Nani).
The modalities for signing the power supply agreement (PSA) with SECI are being finalised and the officials said that formal agreement would be inked in the coming months. About 17,000 million units will be procured, according to officials as agriculture demand stands at about 22-26 per cent of the total demand of 66,000 MU of annual demand of the state. The supply will be done in a phased manner and is likely to be started in 2023-24.
“To provide free and quality power in the day-time to farmers on a sustainable basis, and to ensure that the free power initiative does not become a burden to the government, the Cabinet has cleared the proposal to enter into an agreement with SECI for procurement of 7,000 MW annually,” the minister said after the Cabinet meeting on Thursday. In a press release later, the government said that Rs 2,000 crore would be the estimated savings per annum.
It may be recalled that the state government proposed to establish 10,000 MW solar power plants — 6,400 MW in the first phase — as a part of its endeavour to offer free power to the farmers for the next 30 years. Accordingly, AP Green Energy Corporation Ltd (APGECL) floated tenders in December, 2020, and firms including Adani Renewable Energy, HES Infra, NTPC, Shirdi Sai Electricals, and Torrent Power were later finalised by the state corporation with the tariff ranging from Rs 2.47/kWh to Rs 2.58/kWh.
However, AP High Court quashed the tenders in June after Tata Power Renewable Energy Ltd filed a petition complaining that the request for proposal and the draft PPA were not in line with the Electricity Act norms. Following this, SECI in September offered 9,000 MW under manufacturing-linked solar tenders it had invited between December, 2019, and June, 2020. SECI offered to make the power of 9,000 MW in three tranches of 3,000 MW each from September, 2024, September, 2025, and September, 202 respectively, in addition to interstate transmission system charges waiver for the entire period of PSA.
In the Cabinet meeting held last month, the State government decided to accept SECI’s offer and started working on finalising the same.