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Andhra Pradesh pegs benchmark price for solar power purchase at Rs 6.49/unit

According to reports, the cabinet sub-committee headed by finance minister Anam Ramnarayan Reddy on Tuesday pegged the benchmark price for purchasing solar power from private generators at Rs 6.49 per unit. This is the lowest price offered by any state government in the country. While NTPC is buying solar power at Rs 6.75 per unit, Rajasthan is doing so at Rs 6.55 per unit and Tamil Nadu at Rs 6.50 per unit.

The state’s decision comes in the backdrop of allegations of irregularities including the existence of a coterie of private developers that aimed at selling solar power at high rates to the state. Of the 331 private parties that bid for supplying 1,600 MW solar power to the state, 95% have quoted a price above Rs 7 per unit and the average bid worked out to Rs 8.9 per unit.

The cabinet sub-committee met twice before Tuesday but could not arrive at a price at which the state should buy the solar power. In the meantime, following a representation, governor ESL Narasimhan dashed off a letter to the state urging it to regulate the tender process.

It was in this backdrop that the cabinet sub-committee decided on Rs 6.49 as the benchmark price. “We have decided that the benchmark price for purchasing solar power would be Rs 6.49 per unit. The committee has decided to give 30 days time to developers to express their readiness to supply solar power at that rate,” said Anam Ramnarayan Reddy.

APTransco had called for bids for setting up solar power units with a total capacity of 1,000 MW, but it received bids for 1,600 MW, with the lowest bid standing at Rs 6.49 per unit and the highest at Rs 15.99 per unit. Sources in the government said that only 9 private generators have quoted less than Rs 6.50 per unit. However, the state has given the others one month time to revise their bids.

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