Andhra Pradesh has the potential to become a thriving hub of renewable energy generation, both in terms of its vast solar parks and large wind projects. The state has an enormous untapped renewable energy potential, estimated at 38.4 GW, 44.3 GW and 33.2 GW for solar, wind and pumped hydro respectively. The total installed capacity in the state stands at around 26.68 GW as of April 2023, with non-fossil fuels contributing 58 per cent and having an installed capacity of 11 GW. This is largely made up of solar and wind power with capacities of 4.5 GW and 4 GW, respectively.
Andhra Pradesh is expected to witness a massive increase in its renewable energy capacity as it has been rolling out multiple programmes, policies and incentives to accelerate the development of the renewable energy sector in the state. Renewable Watch looks at recent developments in the state’s renewable energy sector, the challenges faced and the way forward….
Recent developments
Giving a significant boost to the state’s solar segment, the central government had allocated Rs 164 billion for the establishment of five solar parks in the state. These are the Ananthapuramu I Solar Park (1,400 MW), the Kurnool Solar Park (1,000 MW), the Kadapa Solar Park (1,000 MW), the Ananthapuramu II Solar Park (500 MW) and the Ramagiri Solar Park (200 MW). Of these, the first four are partly functional while the Ramagiri Solar Park is yet to be operationalised. As such, 3,050 MW of the 4,100 MW capacity allocated under the solar parks scheme has been installed.
Andhra Pradesh is at the forefront in the pumped storage space. It has identified potential pumped storage project (PSP) sites of 33,240 MW capacity near the existing reservoirs and off-river locations. Taking into consideration the renewable energy capacity addition targets, hydro – power obligations and the huge, pumped storage potential in the state, the state government notified the Andhra Pradesh Pumped Storage Hydro Power Projects Policy 2022. to encourage, develop and promote PSPs. In May 2022, the state proposed the construction of 29 PSPs. These projects are being designed as a combination of pumped storage, solar and wind energy projects.
The state is also witnessing large investments in the pumped storage space, with many new announcements in recent months. In May 2022, Greenko announced the progress of its large-scale Pinna puram integrated renewable energy project in Kurnool, Andhra Pradesh. The project, with a capacity of 5,230 MW, is being set up at a cost of $3 billion. It will include 3 GW of solar power, 550 MW of wind power and 1,680 MW of pumped storage capacity for six hours. Moreover, in June 2022, the Chief Minister of Andhra Pradesh approv ed PSPs proposed by Adani Green Energy, with a combined capacity of 3,700 MW.
The state is also witnessing massive movement in the green hydrogen space. The Indian Hydrogen Alliance has proposed five National Green Hydrogen hubs in India to be developed by 2025 and one of these is in Andhra Pradesh. Further, in March 2023, Amplus Solar entered into an MoU with the Andhra Pradesh government to set up multiple decentralised green hydrogen production plants in the state. Simultaneously, Ocior Energy India Pri vate Limited announced plans to establish a 1 million tonne per annum (mtpa) green ammonia plant in the state.
Outlook
The state of Andhra Pradesh is finally wit[1]nessing growth in renewable energy capacity additions after almost negligible growth over the past few years, owing to the tariff renegotiation case. In 2019, the Andhra Pradesh government had decided to negotiate and bring down wind and solar power purchase prices in the back[1]drop of poor financial health of its discoms. This order was overturned in March 2022, when Andhra Pradesh High Court stated that the terms of the PPA cannot be altered and that the tariff cannot be renegotiated unilaterally. This development came as a big relief for renewable energy developers.
While the debate surrounding renegotiation of tariffs has created some uncertainties, these are temporary setbacks and the state’s renewable energy sector is expected to bounce back shortly. The setting up of five solar parks in Andhra Pradesh marks a turning point in the state’s solar power landscape. Further more, the state is now developing one of the biggest integrated renewable energy projects in the world, with a capacity of 5,230 MW, which is expected to be operational by the end of 2023. Meanwhile, green hydrogen is also coming up in a big way in the state.
Net, net, Andhra Pradesh is slowly coming out of the shadow cast by the tariff renegotiation debacle and is ready to ramp up its renewable energy growth.
By Anusshka Duggal
