The state was also on its way to achieve the targeted capacity addition of 5,000 MW of solar and 4,150MW of wind power by 2020 and achieve 18,000 MW renewable energy.
The Union Minister of power RK Singh has despatched a letter urging the Andhra Pradesh Chief Minister YS Jaganmohan Reddy not to cancel or reopen the power purchase agreements (PPAs) with the renewable energy (RE) generators in the state without proper examination.
The PPAs were signed during the TDP regime. Singh in his communication dated July 9 has said that the cancellation will send a wrong message that the rule of law does not prevail or contracts are not honoured. The minister warned that investment will dry up and the growth in RE sector will come to halt in the wake of repudiation of contracts.
Singh's communication comes after a month when the Union Ministry of New and Renewable Energy secretary had also requested Andhra Pradesh (AP) not to scrap PPAs of RE power projects. AP government through its order dated 26 June had already formed a Cabinet Sub Committee to "identify the person/persons/institutions responsible for prima facie mala fide decisions and actions, and recommend appropriate action.''
Singh explained that tariffs are fixed by regulators who are independent. ''It is the Central Electricity Regulatory Commission and State Electricity Regulatory Commissions which fix the tariffs after a public hearing and examining the input costs. PPAs are contracts binding on all signatories. If the contracts are not honoured the investments will stop coming,'' the minister said.
Furthermore, the minister said the tariff for solar and wind generation in different states will be different depending upon the solar insolation for solar energy and the capacity utilisation factor and wind speeds for wind energy.''There will be a need for concrete evidence of malpractice or malfeasance to be able to come to a finding of there having been corrupt practice in a particular case. If there is a clear cut finding to this effect that is arrived at, then action can be taken for cancelling a PPA and launching a prosecution. Not otherwise,'' he noted.
Centre's intervention comes at a time when it has launched an ambitious plan to instal RE capacity by 175 GW by 2022. AP has increased the renewable energy capacity to 7,463MW in 2018-19 from 1,340MW in 2014-15 and was among the frontrunners in promotion of solar parks by setting up the world's largest solar power project of 1,000 MW at a single location in Kurnool's ultra-mega solar park.
The state was also on its way to achieve the targeted capacity addition of 5,000 MW of solar and 4,150MW of wind power by 2020 and achieve 18,000 MW renewable energy.
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