Andhra Pradesh Renewable Energy Export Policy unveiled
For perspective, the Union government, in 2015, announced that India would install 175 GW of renewable power by 2022
Ambitiously aiming to attract private investments to help establish renewable power projects of 120 gigawatts (GWs) using the available land bank, the state government has notified the Andhra Pradesh Renewable Energy Export Policy, 2020, which the state Cabinet approved a couple of days ago.
After ruffling feathers by attempting to review renewable power purchase agreements, which spooked private investors across the globe, the government unveiled the five-year policy, coming into force from Friday, to facilitate the lease of five lakh acres of potential land in the state to renewable energy export project developers, to promote setting up of renewable energy equipment manufacturing facilities, and to generate additional revenue to the exchequer.
For perspective, the Union government, in 2015, announced that India would install 175 GW of renewable power by 2022. Though the state has already reached the renewable power purchase obligation (RPO) as notified by the state commission and union ministry of power, the policy has been announced considering the 'huge untapped' potential and availability of land.
The purpose of the policy is to export it without the power distribution companies (discoms) obligated about the procurement. "The power generated from the projects set up under this policy shall be exported outside the state. In case of supply of this power within the state under Open Access, all charges levied by AP Electricity Regulatory Commission shall also be paid; and all the connected regulations shall be complied with...Any injection of energy between synchronisation and declaration of Commercial Operations Date (CoD) shall be treated as inadvertent power and no cost shall be paid by any discom in the state," the policy, notified as per order (MS 20) issued by energy secretary Nagulapalli Srikant.
While the resource allocation would be done on first come first serve basis, the policy said that priority would be given for developers intending to set up the energy export projects along with manufacturing facilities in the state.
The New and Renewable Energy Development Corporation of Andhra Pradesh, (NREDCAP) shall be the nodal agency for implementing the policy.A land aggregating agency - NREDCAP or other - would be arranged to procure and aggregate government and private lands in potential locations. The lands will be leased for 30 years for the Variable Renewable Energy (VRE) projects.
The agency will charge Rs 31,000 per acre per year from the developers as lease rentals, with an escalation of five per cent every two years. The private land owners shall be paid Rs 25,000 per acre per year till the completion of lease period with an escalation of five per cent every two years.
The agency shall remit the entire amount of lease rentals to the exchequer in case of government lands and shall remit Rs 6,000 per acre per year with a five per cent escalation every two years in case of private lands. The project developers will also have to pay green energy development charges and other one-time charges besides the rental. For evacuation (exporting through transmission lines) of the power generated by these units, the state government has given three options for the developers.As of June 30, 2020, the state has a commissioned capacity of 8,200 MW of renewable power.
Incentives to be offered to the developers:
For power generation units
*Land use conversion from “Agriculture” use to “Non Agriculture” use shall be accorded by the government
*Projects will be exempted from obtaining any NOC/Consent for establishment from AP Pollution Control Board
For manufacturing units
*Priority allotment of land on long term lease basis.
*Exemption from payment of Electricity Duty for a period of 10 years from date of commencement of manufacturing activities.
*Extending of incentives as per the prevailing Industrial Promotion Policies of the state.