In a recent development, the Andhra Pradesh Government has taken some steps and amended its Andhra Pradesh Solar Policy 2018, Andhra Pradesh Wind Policy 2018, and Andhra Pradesh Solar & Wind Hybrid Policy 2018. The development took place post the state government observed some issues with the existing Power Purchase Agreements. According to the notification, the unusual spurt in the PPAs have affected the  A.P. DISCOMs and affected them financially. Hence, in order to improve the financial conditions of the Distribution Companies and strengthen them the following changes have been notified in the order:

  • Transmission & Distribution charges for wheeling of Power


The transmission & distribution charges will be applied as per the APERC order for connectivity to the nearest Central Transmission Utility (CTU) via State Transmission Utility (STU) for inter-state wheeling power,  and via STU for intra-state wheeling power. Earlier, the transmission & distribution charges were exempted for all the solar & wind plants and for solar-wind plants up to 50% exemption on the applicable charges was given, which is now amended.

  • Energy banking and Drawal


The banking allowance of 100% is canceled for all the variable renewable energy from all the generators. Further, no payment will be done by the A.P. Discoms in case of an injection of energy takes place between the synchronization and declaration of commercial Operation of Date and will be treated as inadvertent power.

  • Tariff 


The tariff of all the renewable energy projects specified in the solar policy, wind policy and solar-wind hybrid policy cannot exceed the “ difference between the pooled purchase cost and balancing cost.” This also applies to solar rooftop plants (Net/gross metering). APERC will be deciding the pooled and balancing cost every year.

With this the previously stated clauses of procuring around 2,000 MW of solar in five years, signing PPAs for 25 years at the tariff determined in competitive bidding for large-scale solar projects, the tariff to be equal to the average pooled power purchase cost for rooftop solar plants and, the tariffs to be determined through competitive bidding with PPAs for 25 years for wind plants also gets amended. 

  • Land


All the land allotment for renewable energy plants will be on leasehold basis going forward.

In line with all the amendments stated above related clauses in all the three policies are amended or deleted accordingly. The split between the RE generators and government of Andhra Pradesh has been prevailing for quite some time now and with this notification, the authority has taken steps to strengthen the financial situation of the discoms. There have been issues prevailing in the state due to the revision of PPAs, and curtailment of renewable energy plants and this development sure bring down the hyped sentiment in the investors and generators of renewable energy in the state.