Within 24 hours of the Union Ministry of Power’s decision to waive transmission charges for electricity purchased from Adani Green and Azure Power, the YSRCP-led Andhra Pradesh government inked an agreement with the Solar Energy Corporation of India (SECI). This deal covers 12 GW of renewable energy projects awarded to the two companies.
Transmission Charges Waiver Benefits
The waiver of the Interstate Transmission System (ISTS) charges has resulted in savings of 80 paise per unit, which is equivalent to an annual saving of approximately Rs 1,360 crore. This measure incentivises Andhra Pradesh to buy power from these projects, which would otherwise incur additional transmission costs when power is moved through the national grid.
The Power Ministry’s order, issued on November 30, 2021, relaxed two key conditions set forth in a prior order on November 23, 2021. These conditions were: (i) the requirement for projects to be commissioned before June 30, 2025, and (ii) ensuring the power from these projects met the state's renewable power obligation (RPO).
Adani Green Project Delays
According to sources within the Andhra Pradesh government, the first 1,000 MW from Adani Green’s project is expected to be commissioned in April 2025, with the remaining capacity coming online after June 2025.
An Adani Green spokesperson commented that the ISTS waiver was part of the manufacturing-linked tender, ensuring that it aligned with other renewable energy tenders of the time. The spokesperson clarified that it was the state distribution companies (DISCOMs) that benefit from the waiver, not the developers, who only receive a fixed tariff. The delay in project commissioning was attributed to factors beyond the developer’s control.
Power Sale Agreement (PSA) Finalised
On December 1, 2021, just one day after the ministry’s order, the Andhra Pradesh government finalised a Power Sale Agreement (PSA) with SECI. Under the deal, the state agreed to purchase 1,700 crore units of power, with the waiver of ISTS charges offering significant savings. The state would have otherwise incurred an additional 80 paise per unit on top of the Rs 2.49 per unit agreed for the power.
The waiver will save Andhra Pradesh Rs 1,360 crore annually, with the total savings over the 25-year duration of the agreement amounting to Rs 34,000 crore.
PSA Under Scrutiny Following US Indictment
The agreement has come under scrutiny following the US Department of Justice's indictment of Adani Group Chairperson Gautam Adani and his associates, including his nephew Sagar Adani. The indictment alleges bribery payments to secure lucrative power contracts, including Rs 1,750 crore directed to a senior Andhra Pradesh government official. The Adani Group has denied these allegations, calling them baseless.
Transmission Delays and Developer’s Perspective
On the issue of delays in project completion, the Adani Green spokesperson stated that the scheduled completion date (SCOD) of renewable projects under SECI PPAs is affected by grid evacuation availability. These delays are outside the control of the developers and are monitored by the Central Transmission Utility (CTUIL). SECI or other central agencies extend SCOD timelines to account for such delays, recognizing that the plants cannot generate power without grid access.
The spokesperson reaffirmed that the company is fully committed to supplying energy according to the new SCOD timeline set by SECI.
With inputs from agencies
Image Source: Multiple agencies
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