Curtains Finally Coming Down On Andhra Solar Power Tussle?

In a key development, the Andhra Pradesh state cabinet of Chief Minister Jagan Mohan Reddy has accepted an offer by SECI (Solar Energy Corporation of India) to supply solar power to the state. The state has plans to supply solar power to its farmers at Rs 2.49 per unit through its own agriculture feeder lines.

Reports are that SECI has offered to supply 9,000 MW solar power to the state, of which 3,000 MW can be supplied by 2024 and a further 9,000 MW by 2026. The whole 900 MW offer from SECI is from the manufacturing linked solar tender of 12000 MW, which has barely started finding buyers after a wait of more than a year since the letter of awards. Adani Green Energy and Azure Power are the winners who have been waiting since they won. SECI had finally announced the first buyer of power from the tender last month, in the form of Odisha utility GRIDCO.

The move by Andhra is interesting because it could finally achieve multiple objectives. Achieve possible closure on the state’s plans to conduct its  own solar tenders bypassing the MNRE regulations, get closure for the PSA’s SECI needs to sign its own PPA’s and allow work to start in earnest on the full manufacturing linked tender, and perhaps, just perhaps, offer a way out for the state’s pending dispute with other developers for a solution.

Readers will recall that the Andhra Pradesh government had disputed the auctions conducted for the state before it came to power, alleging irregularities and insisting on winning developers paying prices that were achieved subsequently. The state government insisted that developers agree to Rs 2.43 per unit, after the state regulator had approved prices upto Rs 4.84/unit. Developers cried foul, insisting that prices discovered in each auction was a function of the situation prevailing then in the market, and more importantly, the process was run as per law.

Subsequently, the state tried to conduct its own 6.4 GW auctions, where Adani Green was again a key winner, only to have the auctions thrown out by the high court on grounds if being bad in law by June. The big winner thus, is Adani Green, with a stake in either of the two options, be it the state auctions, or now, the SECI proposal to the state government.