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Andhra Pradesh regulator’s tariff order is a mixed bag for wind power generators

According to reports, wind power producers have mixed reactions to the Andhra Pradesh Electricity Regulatory Commission order awarding tariff of Rs 4.70 per unit for power generated from wind farms in the State.

The order is applicable for developers who sign up power purchase agreements with discoms before March 31, 2015.

Some are happy that the tariff has gone up from Rs 3.50 per unit to Rs 4.70 but feel that it falls short of what States such as Rajasthan (Rs 5.44) and Maharashtra (Rs 5.69) are offering. The other provision regarding development of evacuation infrastructure up to the grid is seen as a dampener.

Anil Chalamalasetty, Managing Director of Greenko, told Business Line, “While we are happy that the State Government has taken to encouraging renewable energy sources such as wind and solar, the tariff could have been on par with some other States and close to what Central Electricity Regulatory Commission (Rs 5.30) had broadly indicated.”

While the order does boost the power tariff by about Rs 1.20 paise, it adds additional burden on developers by expecting them to invest in evacuation, said a spokesperson of one of the developers.

The provision regarding the need to develop the evacuation line up to the grid puts additional financial burden on the developers. This leads to higher capital cost and makes projects unviable.

“If the tariffs ordered by other States are anything to go by, it should have been at least Rs 5,” Chalamalasetty added.

Another developer said the onus is on the State to develop the support infrastructure for evacuation of power generated. It is not correct to expect wind farm developer to set up evacuation line, he said.

Several developers such as Suzlon, Mytrah Energy, Greenko, Welspun Energy, have signed up with Andhra Pradesh Government for setting up wind power projects. The State hopes that the new tariff order will encourage them to speed up their projects.

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