This comes against the backdrop of 5.2 giga watts (GW) of solar and wind power projects with debt exposure estimated at over Rs21,000 crore in the state, due to the government’s decision to the State to reopen the renewable energy contracts signed under the previous government of N. Chandrababu Naidu.

The advice of a renewable energy chief executive officer of the Federation of Indian Chambers of Commerce and Industry (FICCI) lobby group raised the issue to the Union’s Ministry of New and Renewable Energy (MNRE) and called stated that despite the reduced interim tariffs to be paid by the state, there is a power outage.

The Electricity Law of 2003 stipulates that the withdrawal of electricity can only be limited for reasons of grid security. With the contractual amount of wind and solar power in the PPAs not being purchased, the state government told Mint that although it ordered its electricity distribution companies (discoms) to procure all this electricity produced, low demand for electricity due to the pandemic has increased grid security concerns.

In a communication to the MNRE last month reviewed by Mint, FICCI Renewable Energy CEO Board Chairman Ranjit Gupta wrote: “Under these circumstances, generators are severely affected, as is the risk of our recalling. loan facilities and the consequent closure of our projects. . “

The hungry discoms fund reduced the contractually approved tariff under the PPA to ??2.44 per unit for solar projects and ??2.43 per unit for wind projects since July 2019; and informed the developers that in the event that they did not agree to the revised tariffs, the PPAs would be terminated. In addition, the developers claim that the contractual amount of wind and solar power in PPAs is not purchased by the state.

“We would also like to draw your attention to the fact that during the course of the legal proceedings, APSLDC (Andhra Pradesh State Load Dispatch Center) and APTRANSCO (Andhra Pradesh Transmission Company) also resorted to excessive illegal reductions in electricity resulting in ‘huge losses of production and income,’ adds the communication from the pressure group.

The tariff renegotiation by the AP government has been contested by developers and the dispute is currently before the High Court of Andhra Pradesh. While overturning the state government order, the Andhra Pradesh High Court ordered the discom to make payment at the reduced provisional rate of ??2.44 per unit for wind projects and Rs. 2.43 per unit for solar projects respectively, until the issue is resolved by the Andhra Pradesh State Electricity Regulatory Commission.

“The payment and discount issues in AP are pending. Due to the pandemic, HC could not hear the IPP (independent electricity producer) case. The industry is calling on the central and state government to intervene in order to demand a speedy hearing and expedite the AP HC decision, ”Gupta, managing director of Azure Power, told Mint.

Andhra Pradesh Energy Secretary N. Srikanth confirmed the statement made by the clean energy developers and said: “From our side, the discoms have been informed that all wind and solar energy must be sent. “

“However, for technical reasons, only a certain quantum can be evacuated, given grid security concerns due to low demand for electricity due to the coronavirus pandemic. This has led to coal-fired projects of state and center operating at low PLF (plant load factor). In such a scenario, we left it to grid management, ”added Srikanth.

This comes against the backdrop of the state government’s accelerated efforts to launch India’s largest solar tender for the establishment of 10 GW of capacity to provide electricity to farmers in need of electricity. investment of approximately Rs35,000 crore.

Questions emailed to an MNRE spokesperson went unanswered.

“In such a scenario where producers are paid at a reduced interim rate and with no hearing date in sight, sustenance becomes difficult with each passing day. In order to repay debts and meet other obligations arising from RE (renewable energy) projects such as employee salaries, operation and maintenance costs, supplier payments, etc., producers must necessarily be reimbursed at the full PPA rate ”, indicates the communication.

The state government has drawn criticism from the Union government and global investors such as Goldman Sachs, Brookfield, SoftBank, the Canada Pension Plan Investment Board, the Caisse de Dépôt et Placement du Quebec, JERA Co. Inc., GIC Holdings Pte Ltd, Global Infrastructure Partners, CDC Group Plc, EverSource Capital and International Finance Corp. from the World Bank.

These renowned companies have invested in Indian companies including ReNew Power, Greenko, Adani Power, PTC India Ltd, SB Energy, Mytrah and Hero Future Energies which have set up projects in Andhra Pradesh. The controversial decision not only drew criticism from the Union government, but also from the governments of France, Canada and Japan given the investments made by their companies in the clean energy space of the state.

Other states like Punjab have taken inspiration from Andhra Pradesh’s playbook and are looking to renegotiate clean energy contracts for operational projects. The decision of the government of Andhra Pradesh led the central government to set up an authority in charge of the execution of the electricity contracts in order to guarantee the respect of the conditions of the PPAs, through the draft amendments to the law on electricity from 2003.

Andhra Pradesh has around 7.7 GW of solar and wind projects and is home to India’s second largest installed clean power capacity, accounting for around 10% of the country’s green power capacity, with investments of ??60,000 crores.

“Andhra Pradesh is an interesting problem that we are trying to solve. The case is before the High Court. The Center has supported the industry to find a solution to the problem, ”a union government official said on condition of anonymity.