Andhra High Court Quashes the 6.4 GW Solar Project Tender by APEGCL

The High Court of Andhra Pradesh has upheld the petition filed by Tata Power Renewable Energy Limited (TPREL) and quashed the request for selection (RfS) and the draft power purchase agreements issued by the Andhra Pradesh Green Energy Corporation Limited (APGECL) for 6.4 GW of solar projects, according to a legal source. The official order is awaited and yet to be uploaded on the court website.
The court directed the Andhra Pradesh government that to procure power, the bidding documents should be per the Electricity Act, 2003. The court further noted that any deviation from the bidding guidelines issued by the Ministry of Power and the Ministry of New and Renewable Energy (MNRE) should be approved by the Andhra Pradesh Electricity Regulatory Commission (APERC).
In December last year, APGECL had floated the tender to develop 6.4 GW of solar projects at ten locations in the state. The state government had planned to install 10 GW to ensure nine hours of daytime free power supply to the agriculture sector on a sustainable basis. The program was proposed in February 2020 and approved in June of the same year.
In January this year, the High Court had upheld TPREL’s contention that APGECL’s RfS and draft PPAs for 6.4 GW of solar projects for farmers in the state were in gross violation of the provisions of the law. TPREL cited a clause in the draft PPA that sought to oust APERC’s statutory powers and jurisdiction. It also noted that APEGECL deviated from competitive bidding guidelines without getting the Commission’s approval. The dispute resolution mechanism provisions in the draft PPAs proposed to vest the power to arbitrate disputes with bureaucrats, which was a violation of the provisions of the Electricity Act.
TPREL pointed that APGECL does not have the authority to issue RfS or draft PPAs as per the Electricity Act’s provisions since it was neither a generator nor a licensee.
On January 8, 2021, the state High Court had directed APGECL not to enter into any agreements for its tender for 6.4 GW of solar projects until further notice in response to TPREL’s appeal.
The auction held in February had resulted in tariffs ranging between ?2.47 (~$0.033)/kWh and ?2.58 (~$0.035)/kWh. The auction winners included Adani Renewable Energy, HES Infra, NTPC, Shirdi Sai Electricals, and Torrent Power.
According to Mercom’s India Solar Project Tracker, Andhra Pradesh currently has 3.7 GW of large-scale solar projects in operation, while around 1.3 GW of projects is under different stages of development.