1. Home
  2. India
  3. 10,000 MW solar plants will help Andhra Pradesh save Rs 48,000 crore over 30 years
10,000 MW solar plants will help Andhra Pradesh save Rs 48,000 crore over 30 years

10,000 MW solar plants will help Andhra Pradesh save Rs 48,000 crore over 30 years


Andhra Pradesh currently has installed capacity of 20,081 MW, of which renewable energy is 8,220 MW; Green Energy Corp yet to get project appraised by APERC

VIJAYAWADA: While energy experts continue to express concern that addition of generation capacity — installing 10,000 megawatts (MW) solar power plants — in an already energy surplus state may further burden the beleaguered power sector, the state government has estimated that the mega projects would help save over Rs 48,800 crore over 30-year-long power purchase agreement (PPA) tenure.

Besides monetary benefits, there will also be employment and environmental benefits, the energy department claimed.

The basis for addition of more capacity, according to AP Green Energy Corporation Ltd, the project executing authority, is that the demand for power in the next three years would significantly shoot up amid the falling solar power prices.

However, according to the approved load forecast by AP Electricity Regulatory Commission (APERC) for the fourth control period (2019-20 to 2023-24), the state peak demand may only be around 15,539 MW.

The State currently has an installed capacity of 20,081 MW, of which renewable energy is 8,220 MW. Peak demand reached is 10,207 MW, of which agriculture demand would be around 30 per cent.

The APERC has also worked out a worst-case scenario in terms of long-term capacity addition planning and approved only 1,000 MW based load capacity addition by 2023-24 as it would be useful for the fifth control period (2024-25 to 2028- 29).

In fact, the AP State Power Employees Joint Action Committee (APSEJAC) has also held discussion on the same with the management that the state has already been paying backing down costs and fixed charges to honour must-run clause of variable renewable energy (VRE) units and addition of more capacity would only further burden the already cash-strapped power utilities.

Energy minister Balineni Srinivasa Reddy, after the discussion with the JAC members, said the power demand is set to rise significantly and that the project would help bring monetary savings as the cost of solar power remains lower even af ter factoring in f ixed charges. In its submissions to the judicial preview, the APGECL said that the energy demand in the next two-three years could potentially be higher than the proposed addition.

“Considering the historical CAGR of electricity demand of six per cent to nine per cent, the demand increase in the next three years could potentially be higher than the proposed solar capacity of 10,000 MW, which corresponds to 15,000 million units,” the APGECL said. It also pointed out that the average cost of supply has been increasing at compounded annual growth rate (CAGR) of 5.01 per cent over the past five years, and 50,000 new agriculture connections are being added to the grid annually. “The government is keen on providing free and sustainable agriculture power for 30 years. The project has been designed keeping that commitment in mind,” a senior official explained.

APGECL is yet to get the project appraised by APERC. Experts in the field had sent their objections to the judicial preview raising concern over the capacity addition and also argued that the fate of existing APGENCO (thermal) units remain uncertain as they will have to be backed out. The state also has to pay fixed costs even if the units are backed down, they noted. The State officials, on their part, claimed that even after considering the back down charges and other potential expenses, the 10,000 MW solar power plants project would help accrue savings of estimated Rs 48,000 crore.

“The average power purchase cost for APDISCOMs is Rs 4.68/kWh as per the Retail Tariff Order for FY21. On the other hand, solar tariffs have been on a falling trend. The recent tariffs discovered in various states including margin (charged by SECI) are in the range of Rs 2.43-3.02/ kWh. Overall, the net present value of savings for the government of Andhra Pradesh is estimated to be over Rs 48,800 crores over 30-year PPA tenure, after accounting for costs associated with backing down of the thermal plants, balancing costs and revenue earned from sale of Renewable Energy Certificates (RECs),” APGECL explained.

Source: newindianexpress
Anand Gupta Editor - EQ Int'l Media Network