The Andhra Pradesh High Court has quashed the request for selection (RfS) and power purchase agreement (PPA) for procuring 6.4 Gw of solar power projects. Tata Power Renewable Energy had moved the HC challenging the RfS and PPA issued by the Andhra Pradesh Green Energy Corporation (APGECL) in January 2021.
Adani Green Energy (AGEL) in February won five mega solar power projects of 600 megawatt (Mw) each through this tender. Government-owned NTPC won 600 Mw in the auction, quoting the lowest tariff of Rs 2.48 per kWh (unit). The lowest tariff discovered in the whole auction process was Rs 2.47 a unit by Torrent Power for a 300 Mw solar project. The award of tender was put on hold.
While quashing the entire process, the court held that the state had awarded solar power tenders in contravention of the Electricity Act, 2003.
Justice M. Ganga Rao delivering the final verdict on Thursday ordered the state government to call for fresh tenders and formulate new power purchase agreements (PPAs).
On 31 November 2020, the Andhra Pradesh Green Energy Corporation Ltd (APGECL) had initiated the tender process for setting up 10 solar power units to produce 6,400 Mw exclusively for agricultural usage.
The APGECL stated in its PPA that any dispute regarding the project would be settled by the state government, as against the legal requirement of moving the state or central electricity regulator. Tata Power Energy Limited objected to this provision and challenged it in the high court. However, the APGECL had continued with the tendering process despite the legal dispute.
Tata Power argued that Electricity Act, 2003 is a complete code and issues such as competitive bidding must be in terms of the Act and the Regulator has an intrinsic role to play in such transactions. However, AP had formulated a method outside the Act and also outside the scope and powers of Regulator, which is not permissible. The court was of the same view while squashing the tenders.
The petitioner argued that the PPAs are in contravention to the bidding guidelines issued by the Central Electricity Regulatory Commission.
The grid connected power is to be generated at 10 solar parks in Andhra Pradesh under the tender. The plants are planned to be built in the districts of Kurnool, Ananthapuramu, Prakasam, and Kadapa.
The high court has instructed the AP government to strictly comply with the Act and the guidelines under its framework. In case the state wanted to effect any deviation, it must be approved by APERC, the court stated.
