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Andhra Pradesh government directs discoms to take wind power in full

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The Economic Times
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The Andhra Pradesh government has clarified that state discoms have to take all the power wind developers produce and pay for it, irrespective of the capacity utilization factor (CUF) of the developer’s project, bringing to an end a major controversy in the state’s wind energy segment. 

In its order setting the feed-in tariff discoms should pay wind energy developers, Andhra Pradesh’s power regulator had assumed a CUF of 23.5% for an average wind project. State discoms had been interpreting this as a directive to accept only the quantity of power a wind plant would generate if its CUF was 23.5%, and reject any additional power supplied. If the plant produced more power by adopting efficiencies that led to a higher CUF, the discoms would turn it down. 

Anand Kumar, Secretary, Ministry of New and Renewable Energy (MNRE) had written to Ajay Jain, Principal Secretary in Andhra Pradesh’s Energy ministry, in December last year that “the generic tariff determined by the Andhra Pradesh Electricity Regulatory Commission (APERC) may have taken 23.5% CUF as average CUF in the state for wind power projects and therefore, it is likely that there may be certain sites where CUF is more than the average CUF”. On Wednesday, Jain wrote to the Andhra Pradesh Electricity Regulatory Commission (APERC), as well as all state discoms, that “in the view of Secretary, MNRE’s letter, discoms have to treat wind power as “must-run stations” and take the entire power from them without curtailment.” 

Developers estimated that wind power from over 2000 MW of projects had been turned down by the state’s discoms since March this year. “These would have all turned into NPAs. The clarification is really good for the industry,” said Sunil Jain, President, Wind Independent Power Producers Association (WIPPA). 

Some in the industry felt, however, that the bigger problem of ‘backdowns’ – discoms’ refusal to take wind power at times citing non-availability of grid capacity – had not been addressed. “In all these years, whenever the discoms backed down, they basically said they don’t have grid capacity,” said a developer who did not want to be named. “Rarely did they say it was because the wind project was generating more power than had been estimated, or that they were not willing to pay for the extra power. The letter will not make much difference to the current situation.” 

The wind industry has been going through a difficult phase lately due to paucity of grid transmission facilities. Developers feel this is leading to connectivity issues and hence participation in inter-state bids has been lukewarm. Tariffs too have been rising because debt rates are firming up. 

Author: Sustainability Outlook Desk