Turnaround as Andhra Pradesh agrees to buy power from Kadapa solar plant

Despite the 250 MW solar project securing a record low bid of INR 3.15 ($ 0.05)/kWh in April, Andhra Pradesh refused to buy the generated power, after tariffs fell further in subsequent auctions. This decision has now been rescinded, according to The Economic Times, with the affected parties having reached a compromise.

Image: NLC-India

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Andhra Pradesh has finally agreed to buy electricity from the 250 MW Kadapa Solar Park, after seven months of negotiations, The Economic Times reports.

Power utility, NTPC Limited originally awarded the project to SolaireDirect, a subsidiary of French company, Engie, in an auction held back in April 2017. The company won the project at a tariff rate of INR 3.15 ($ 0.05)/kWh, which was a record low at that time. However, a month later, prices fell even further, to INR 2.44 ($ 0.043)/kWh, during auctions held in Rajasthan.

These lower prices led to the refusal by Andhra Pradesh to buy power from the Kadapa Solar Park. Even after four months of discussions with other states and their DISCOMs (Distribution Companies) , NTPC was unable to secure a buyer for the power produced by the plant.

However, a mutual decision has now been reached after several rounds of discussion between NTPC, France’s Engie and state officials. Ajay Jain, principal secretary for energy in Andhra Pradesh told the Economic Times, “We’ve reached an agreement with NTPC to buy power from its proposed 250 MW plant at Kadapa provided it is bundled with 125 MW capacity of thermal power so that the tariff is lower than the INR 3.15 ($0.049)/kWh NTPC had initially proposed.”

The AP government has not disclosed the revised tariff.

Engie has a number of solar projects in India, with around 360 MW already commissioned and 100 MW under construction.

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