Will The Andhra Pradesh Saga Reach Endgame With Central Intervention?

In a further turn to the ongoing tussle between developers in Andhra Pradesh and the state government there through its discoms, the National Solar Energy Federation of India (NSEFI), the apex body of solar energy developers in the country, has reached out once again to the state’s chief Minister to intervene, and for good measure, Shri R.K. Singh, the Union minister for Power, New and Renewable Energy.

The letters, sent from the office of Subrahmanyam Pulipaka, the CEO of the NSEFI, make a plea for direct intervention from the respective leaders, owing to delays caused at the state high court hearings, ever since the Covid 19 pandemic  broke out.

The letter to Mr Singh points out that far from being any closer to a resolution in such a key renewable energy state, developers have been facing massive curtailment of upto 100 percent for hours at a time, besides further deductions on payments due, that have explained informally as due to higher than projected generation in wind projects (over 23.5 percent), or DC overloading in solar projects.

Even the lower amounts mandated as an interim measure by the high court are simply making the viability gap worse for many developers, pushing some towards ‘bankruptcy’, according to the letter.

The letter to the state Chief Minister YS Jagan Mohan Reddy simply makes a plea for a direct intervention in the form of an early date at the court hearings. The letter points out that the last hearing at the high court was on March 11, and delays in quicker resolution can impact investments into the states ambitious plans.

For developers embroiled in the controversy for over a year now, every assurance of finding a way out has flopped so far, leaving them both vulnerable, and ever more desperate for a faster resolution. But so far, it does look like none has buckled down to accepting the state government demands for renegotiation at a much lower price. Something that would not only open up a pandora’s box across states, but genuinely sound the death knell for many projects across states that are also finely poised currently.

The AP imbroglio has been widely quoted as one of the worst examples of contract sanctity seen in India in recent years, and has repeatedly been cited by the Power Minister himself in his interactions, as a reason to bring in a contract enforcement authority, mandated in the proposed new Electricity Act. But with the passage of the act itself going through political negotiations, and a pushback from multiple states, there is indeed a strong case for better sense to prevail to resolve issues faster. The very fact that renewable energy projects have become just another power project for many state governments, instead of the added urgency that these projects deserve as a green energy projects points to a worrying lack of urgency at multiple levels on just why these needed to be treated on priority.