In Short : The Solar Energy Corporation of India (SECI) expects distribution companies (DISCOMs) to procure approximately 1,000 MW of renewable energy in January 2024 from ongoing auctions. This procurement follows SECI’s efforts to address the energy demand, though challenges remain with the unsold capacity from previous auctions. DISCOMs are encouraged to finalize agreements for these projects, which involve setting up solar power generation capacity under SECI’s competitive bidding programs.
In Detail : VIJAYAWADA – Even as the State government is yet to take a decision on the deal with SECI (Solar Energy Corporation of India), a public sector company, power distribution companies in Andhra Pradesh (APDISCOMs) are set to go ahead with the agreement. While explaining the energy status in the State, APDISCOMs in its Aggregate Revenue Requirement (ARR) and Tariff Proposal for the Retail Supply Business for financial year 2025-26 to Andhra Pradesh Electricity Regulatory Commission (APERC) mentioned about the power supply from SECI.
Uncertainty prevails over the deal considering the controversy surrounding the agreement that was signed by the previous YSRCP dispensation, led by YS Jagan Mohan Reddy. There has been an increasing demand by Opposition parties and people’s organisations to scrap the deal, citing severe burden on the people of the State as prices of solar energy are expected to drop in the coming years.
The State government is taking time to take a decision on the matter, given the fact that not honouring the deal can have serious consequences on the cash-strapped State. If the government decides to scrap the deal, it has to pay anywhere between Rs 2,500 crore to Rs 2,800 crore to SECI. It might also send a wrong message to potential investors.
To supply free power to the farming community, reduce power procurement costs and subsidy burden on the government, the three DISCOMs had entered into a Power Sale Agreement (PSA) with SECI on December 1, 2021, for the procurement of 7,000 MW in three tranches. While 3,000 MW each in two tranches was to be procured in October 2024 and 2025, 1,000 MW was to be procured in October 2026.
‘3-month delay may not be a problem’
However, SECI will supply 1,000 MW solar power in the first tranche for October 2024 from January 15, 2025. This was disclosed in the ARR and Tariff Proposal filed by DISCOMs to APERC. According to an official from the Energy Department, the delay of three months during non-peak months might not be a problem, but the reduced quantum of power supply has to be viewed seriously. As the issue has been taken to the notice of APERC and a public hearing is due from January 7 to 10, it has to be seen what the regulatory authority would say on this matter, he said.
SECI explained DISCOMs that a three-month delay in CTUIL’s (Central Transmission Utility of India Limited) completion of transmission elements resulted in the delay in power supply. Further, 3,000 MW will be supplied in 2025-26, and the remaining 3,000 MW in 2026-27. While the State government will bear the cost of power procurement under the PSA, the solar power developers will set up plants in Rajasthan and Gujarat. The tariff for the procurement has been fixed at Rs 2.49/unit, including trading margin, for 25 years.
The Andhra Pradesh government set up a Special Purpose Vehicle (SPV), AP Rural Agriculture Power Limited (APRAPL), to supply power free of cost to agriculture consumers. Once the SPV obtains a licence and operations commence, the PSA will be transferred from DISCOMs to APRAPL for supply of power to agriculture connections.
