With a sizeable target of 18 GW to be achieved by 2022, of which 6.5 GW already commissioned so far, Andhra Pradesh is among the leading states in renewable energy adoption in the country. Ajay Jain, principal secretary, Energy, Infrastructure and Investments and Capital Region Development Authority, Andhra Pradesh government, talks about the past enablers and future prospects for renewable energy in the state. Excerpts….
What have been the highlights of the renewable energy sector in Andhra Pradesh over the past year? What is the likely capacity addition over the next year?
The Andhra Pradesh government had announced solar and wind power policies in 2015, which have provided a number of incentives for renewable energy development. We have added about 5,000 MW of renewable energy capacity (2,000 MW of solar and 3,000 MW of wind) during the past three years. The state led in wind capacity addition in the country, adding around 2,180 MW during 2016-17. In the current year, 600 MW each of wind and solar capacity is proposed to be commissioned. We are targeting the addition of 18 GW of capacity by 2022, of which 6.5 GW has already been commissioned.
What are the planned policy initiatives in the state?
The solar and wind power policies of 2015 provide a number of incentives like the waiver of transmission and wheeling charges, treatment of renewable energy as must-run plants and other incentives in the allotment of land to wind projects. The government also has a new wind-solar hybrid policy in the pipeline to promote this segment.
What is your opinion on promoting open access for renewable energy projects? Has RPO compliance improved in the state?
Open access is being granted for all renewable energy projects as per the Andhra Pradesh Electricity Regulatory Commission (APERC) regulations. Renewable purchase obligation (RPO) compliance has increased in the state from 5 per cent in 2015-16 to 9 per cent in 2016-17. For 2017-18, the state is expected to exceed the RPO mandate of 9 per cent by sourcing almost 18 per cent of its energy from renewable sources.
What are the likely future tariff trends in the state’s wind and solar segments?
The state has invited bids for the promotion of solar energy since tariffs have fallen to Rs 3.15 per unit in 2016-17 from Rs 6.49 in 2014. We expect the tariffs to be even lower than Rs 3 in future solar bids. Similarly, in the wind segment, the state has shifted to competitive bidding.
Has the state been able to significantly harness its solar-wind hybrid potential?
The state has huge potential for solar-wind hybrid energy, particularly in the Anantapur, Kurnool, Kadapa and Chittoor districts. It has decided to develop one solar-wind hybrid farm along with a storage system. The farm will be funded by the World Bank and will have a capacity of 150 MW.
What is your view on the renegotiation of PPAs?
Power purchase agreements (PPAs) are contractual agreements between two parties which, once signed and approved by the regulatory commission, should be honoured by both parties. Any renegotiation of PPAs dents investor confidence and should not be resorted to.
What are some of the key challenges faced by the state’s renewable energy sector?
The biggest challenges being faced by the sector are increased difficulty in grid management due to increased renewable energy capacity addition; and the weak financial position of the discoms.