The Andhra Pradesh Electricity Regulatory Commission’s (APERC) move seeking truncation of the average length of power purchase agreements (PPA) to a fifth has seen renewable energy companies raise concerns.
Most PPAs are signed for 25 years, but the Andhra Pradesh Electricity Regulatory Commission (APERC) would like the duration reduced to five years.
The industry is alarmed by the potential violation of the sanctity of contracts and fears that such moves, which are sought by state distribution companies because newer plants offer lower tariffs, would discourage further investment in the sector.
With both solar and wind tariffs having fallen sharply in the last few years, discoms in the state had approached the APERC seeking such a review as they felt they were paying too much for renewable energy in the PPAs of projects signed years earlier.
