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Solar photo-voltaic projects in Andhra Pradesh face implementation hurdles

According to reports, solar photo-voltaic companies, setting up projects in Andhra Pradesh, are faced with implementation hurdles, due to the lack of clarity on banking and settlement issues.

Even though more than 300 MW capacity will be ready and operational within a short time if these issues are sorted out, there are delays in addressing them, according to sector players.

Gautham Nalamada, Executive Director of Photon Energy, told Business Line, “The Government is treating solar energy as power generated from fossil fuels. Issues relating to sale of power, its settlement, are key for bankers to lend money.”

“Once these are sorted out, banks will release funds to facilitate implementation of projects,” he felt.

AP Transco and State Load Despatch Centre have to provide clarity on settlement to complete projects. There is some sort of ad-hoc settlement code for payment of power supplied. The issue of sale to third parties must addressed.

Devendra Surana of Surana Group said clarity on banking and settlement issues relating to solar power have to be addressed to expedite projects. Several companies are at an advanced stage of completing their projects.

“Therefore, clarity on these issues, will help promote solar PV units in the State,” he said.

Srinivas Ayyadevara, Executive Vice-President of the Federation of Andhra Pradesh Chamber of Commerce and Industries, said, The tariff offer of Rs 6.49 paise offered under the solar policy bids is financially not viable. “We do not expect good response to the bids even though over 180 applications have been made,” he said.

It is not appropriate to compare Rajasthan tariff with that of Andhra Pradesh. In Rajasthan, land has been given by the Government and settlement is at the plant. They also get about 10 per cent more solar power there, Gautham said.

In fact, the tariff offered by Tamil Nadu at Rs 6.50 a unit with escalation clause, works out to about Rs 7.50 to 8/unit over a period.

Asked about the solar bid status, Hiralal Samaria, Chairman and Managing Director of AP Transco, said the tariff offered by the State was attractive and comparable to what Rajasthan offers.

Defending the Government stand, he said, “We are hopeful of good response from the developers.”

However, the developers feel that the response would be tepid with current tariff offer.

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