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Andhra Pradesh issues renewable energy export policy

The Andhra Pradesh government has announced the Andhra Pradesh Renewable Energy Export Policy, 2020, which will be applicable to solar, wind and wind-solar hybrid projects. The policy has been announced in order to encourage, develop and promote renewable energy projects for the purpose of energy export outside the state without any obligation of power procurement by state discoms. The policy aims to promote the setting up of 120 GW of renewable energy projects as well as equipment manufacturing facilities, attract private investments, and improve the local economy. It also intends to ensure the utilisation of 500,000 acres of potential land in the state by developers. The policy will be effective for five years from the date of issuance. Non-conventional Energy Development Corporation of Andhra Pradesh Limited (NREDCAP) will act as the nodal agency under this policy.

Key features of the policy

Power utilisation: The power generated from the projects set up under this policy will be exported outside the state. If this power is supplied within the state under open access, then all charges levied by the Andhra Pradesh Electricity Regulatory Commission for open access projects will be paid. Energy banking will not be allowed and all energy settlements will be done time-block-wise. Any injection of energy between synchronisation and the declaration of the commissioning date will be treated as inadvertent power and no cost will be paid by any discom in the state.

Resource allocation: While the allocation of the energy resource potential to developers will be done on a first come, first served basis by the nodal agency, priority will be given to developers intending to set up energy export projects along with manufacturing facilities in the state.

Land procurement and payments: The government will acquire the land for project development through a land aggregating agency, such as NREDCAP, or any other agency. The agency will procure and aggregate the government and private land at potential locations for allotment to the project developers on a lease basis. Land lease facilitation will be done by the nodal agency for the developers against a payment of prescribed charges. Project developers will have to pay lease rentals annually along with green energy development charges. One-time charges for the project include a local area development fund of Rs 500,000 per acre payable to the park developer, park infrastructure development charges as per the detailed project report estimates and a one-time processing fee of Rs 2,000 per acre collected by the nodal agency.

External evacuation infrastructure: The state provided developers with two options for setting up evacuation infrastructure for the projects. The first option allowed developers to connect to the state transmission utility (STU) by laying a line to the STU grid substation at their own cost or pay APTRANSCO to do it. The second option allowed developers to bear the entire cost of the external evacuation infrastructure, including the connecting line, grid substations and upstream network up to the central transmission utility.

Incentives: The government and private land transferred to the land aggregating agency will be converted from agricultural land to non-agricultural land by the government before it is transferred. The land leased from the land aggregating agency can also be used for non-agricultural purposes after a conversion fee is collected from developers by the nodal agency. The projects will also be exempted from obtaining no-objection certificates or consent for establishment from the state pollution control board. New solar manufacturing facilities, equipment and ancillaries set up within the state have been incentivised under the policy. These projects would be given priority for the allotment of land on a long-term basis and will be exempted from electricity duty for 10 years. They will also receive incentives under the industrial promotion policies of the state government.

Conclusion

The state has scaled up its renewable energy capacity significantly. Recently, in June 2020, the Andhra Pradesh government granted approval to a proposal for setting up a 10 GW solar power project. With a large installed renewable energy capacity of solar and wind power, Andhra Pradesh is well positioned to export its excess renewable energy generation after meeting its own renewable purchase obligations (RPOs). The policy sets a precedent for other renewable-rich states such as Rajasthan, Madhya Pradesh and Tamil Nadu, with Tamil Nadu already working on plans to export renewable energy to western states. This will help these states earn more revenue and fulfil their RPOs. The framework laid out by this policy will serve as a useful reference model and help build a better renewable energy distribution model across states.

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