The Andhra Pradesh High Court has cancelled the auctions held by the state government in February for creation of 6,400 mega-watt (MW) solar power capacity, denting the coastal state’s ambition to reduce power tariffs by building low-cost renewable energy units. Ruling on a petition filed by Tata Power Renewable Energy, the court stated the whole tendering and auction process ‘substantially deviated’ from the provisions of the Electricity Act, 2003, and the guidelines for competitive bidding.
The court allowed the state to invite fresh bids to build the capacity, after aligning the bidding conditions with the Act and the relevant terms. Analysts feel that the new auctions, if any, will likely discover higher tariffs due to rise in price of solar modules and upcoming import restrictions which will drive up equipment costs.
