A recent order of Andhra Pradesh Electricity Regulatory Commission (APERC) was stayed by the Andhra Pradesh High Court related to the reduced tariff of electricity supplied by the wind projects that received Generation-based Incentive (GBI) from the center.
A recently proposed acquisition between Greenko and Orange went into shambles due to the significant order. The central government had devised the GBI scheme only to encourage investments in the wind sector by providing an additional incentive of 0.50 for every unit of energy actually generated by a generator over and above the tariff granted by the regulator.
The APERC order in question was challenged by Orange renewables and HERO group and requested suspension of the order at a primary level. Apparently, APERC does not have the jurisdiction to alter its own order.
The APERC had passed the order modifying its earlier tariff orders on the ground that it had earlier failed to give effect to its regulations that require incentives to be deducted from the tariff. “Prima facie, the 1st respondent- Commission has no jurisdiction to exercise the power of review in the manner it did,” the court said in its order.
Andhra Pradesh has approximately 2,000 MW wind capacity installed and the order had an impact of more than INR 2,000 Cr, for the wind generators in the state who had factored in the GBI while working ou their finances for the projects.
As of now, the Greenko-Orange deal has been called off to the delay of payments related to GBI. Wind generators have been denied GBI in Andhra Pradesh for over two years now and this development might bring some clarity for them.