Andhra High Court Rules in Favour of Solar, Wind Developers

In a judgement that seeks to put to rest all uncertainties regarding the sanctity of Power Purchase Agreements and the competency of experts who decided on rates, the Andhra Pradesh High court has ruled in favour of solar and wind developers in the case against the state discoms, and by default, the Andhra state government. The full judgement can be viewed here.

Having bunched all the petitions together, the High court, in its judgement yesterday, ruled that the order of the single judge bench of the same court that had set an ad hoc rate of Rs 2.44 for solar power and Rs 2.43 for wind power, be set aside, and developers be paid their dues as per PPA’s by the Andhra discoms within a period of six weeks. The judgement was delivered  by a bench of Chief Justice Prashant Kumar Mishra, and Ninala Jayasurya.

The judges also ruled on sticking to the rules in place regarding curtailment of renewable energy (must run status), after noting that in the past 2 1/2 years, no such grid issues as feared by the SLDC had occurred. It also took cognizance of the developers  claim that power curtailed was being brought from thermal generators, against the extant rules. Thus, the status, that merit order dispatch will not apply to renewable energy, was restored.

With this ruling, the court has finally set aside the push by the Andhra discoms (government) to reduce contracted rates after signing of the PPA’s. The judgement was much needed to correct the tendency to push for retrospective action, besides upholding the sanctity of the PPA contracts, the bedrock of the Indian private power generation sector. A who’s who of India’s top renewable developers will benefit from the ruling, as assets considered NPA’s since 2019-20 can be considered good again. The developers had the full backing of the central ministry (MNRE) in their struggle. In fact, the proposed Electricity Amendment (act) 2021 had incorporated specific provisions related to non-negotiability of PPA terms due to this experience. Hopefully this will also put to rest the designs of some other states to reopen old PPA’s. India needs to look ahead for renewable energy goals, not look back.