According to reports, wind power developers in Andhra Pradesh are in a huff over lower power tariff. A petition before the Andhra Pradesh Electricity Regulatory Commission (APERC), the body that fixes power tariffs, in the state is already pending.
Andhra Pradesh at present allows Rs 3.50 per unit. Among other states, Maharashtra is allowing Rs 5.37 per unit and a generation-based incentive of 50 paise. Rajasthan has recently raised the tariff from Rs 4.22 to Rs 4.46 and a 4 per cent evacuation incentive.
According to Vikram Kailas, MD, Mytrah Energy India, the tariff in Andhra Pradesh is among the lowest. Other states are giving around Rs 4.50 to Rs 5.50 depending on the wind zone they come in, he said.
Andhra Pradesh, in terms of wind resources, is a good destination. However, the lower tariff is making it difficult for the companies here. “The IRR now is between low and high teens for 25 years. Without a tariff revision, most of the projects will not graduate from being demonstration projects,” he said adding that typically it took about Rs 6 crore for setting up each megawatt power by wind.
Out of the 63 mw it planned at Vajrakarur, it will look to commission 42 mw by March and the remaining in the first quarter of the next financial year. The 80 mw project at Burgula will also be commissioned in the first quarter, he said of the projects in the state.
“The wind monitoring policy in Andhra Pradesh where developers pay Rs 1 lakh and block about 10 km land for three to four years. This is also a deterrent for serious players to invest and commission projects due to non-availability of sites,” said an industry official, who did not want to be named.
There have been instances of developers taking back the turbines fixed in Andhra Pradesh to a location where the tariff is better, he said.
According to SS Murli, secretary of the Indian Wind Power Association (Andhra Pradesh chapter), the sector is not seeing any significant investments due to the low tariffs.
“Wind farms are a ray of hope to bring investments into the Rayalaseema region of Andhra Pradesh, which is known for limestone and allied mining activities. This has potential to bring more than Rs 45,000 crore investments as the wind energy potential is estimated to be about 8,000 mw,” said Murli.
When contacted, Chandan Mitra, VC and MD of Non-Conventional Energy Corporation of Andhra Pradesh, the nodal agency for sanctioning wind projects, said: “The industry has asked for a revision of the tariff. It is pending before the APERC.”
The state has 4,700 mw capacity allotted and of this 2,000 mw has been sanctioned and the remaining 2,700 mw is under consideration. About 32 projects are commissioned in the state and 62 are in the pipeline.