Renewable power producers have raised the issue of states like Andhra Pradesh and the Punjab renouncing power purchase agreements (PPAs) and called on the governor of Punjab to veto a draft. law that would allow the renegotiation of existing PPAs in the State.

The government of Andhra Pradesh is currently engaged in a legal battle with renewable energy producers to renegotiate contractual electricity tariffs and the Punjab Assembly has passed a bill to renegotiate tariffs under existing PPAs. Solar energy tariffs have dropped significantly over the past 5 years, making electricity purchased under earlier solar PPAs significantly more expensive than more recent PPA prices.

In a letter to the Union Minister of Energy, the Association of Electricity Producers (APP) said the Punjab government’s decision could jeopardize 27,000 crore of investment and lead to higher costs. non-productive assets in banks. “We recommended that the Punjab Bill (Punjab Energy Security, Termination of PPAs and Redetermination of Power Tariff Bill) not be approved by the governor because it rescinds the electricity law,” said Rajiv Ranjan Mishra, managing director of ‘Apraava Energy.

Renewable power producers have raised the issue of states like Andhra Pradesh and the Punjab renouncing power purchase agreements (PPAs) and called on the governor of Punjab to veto a draft. law that would allow the renegotiation of existing PPAs in the State.

The government of Andhra Pradesh is currently engaged in a legal battle with renewable energy producers to renegotiate contractual electricity tariffs and the Punjab Assembly has passed a bill to renegotiate tariffs under existing PPAs. Solar energy tariffs have dropped significantly over the past 5 years, making electricity purchased under earlier solar PPAs significantly more expensive than more recent PPA prices.

In a letter to the Union Minister of Energy, the Association of Electricity Producers (APP) said the Punjab government’s decision could jeopardize 27,000 crore of investment and lead to higher costs. non-productive assets in banks. “We recommended that the Punjab Bill (Punjab Energy Security, Termination of PPAs and Redetermination of Power Tariff Bill) not be approved by the governor because it rescinds the electricity law,” said Rajiv Ranjan Mishra, managing director of ‘Apraava Energy.

Industry representatives noted that technological breakthroughs had driven prices down sharply, but investments made earlier were based on a price discovery mechanism and technology of the time.

“Andhra Pradesh and Punjab have retracted the majority of renewable PPAs. If you agree to the cancellation of PPAs due to a technological breakthrough that drives down rates, then you must accept all cancellations as a breakthrough results in a reduction in prices. For investments to continue and if we are to meet our target of 500 GW of renewable energy capacity, we need to ensure that previous contracts are honored, ”said Ashok Khurana, CEO, APP.

The Department of Energy did not respond to requests for comment emailed by The Indian Express.

Experts noted that in addition to the measures taken by the two states to renegotiate contracts, renewable energy producers have faced significant contributions from state discoms.

Industry representatives noted that technological breakthroughs had driven prices down sharply, but investments made earlier were based on a price discovery mechanism and technology of the time.

“Andhra Pradesh and Punjab have retracted the majority of renewable PPAs. If you agree to the cancellation of PPAs due to a technological breakthrough that drives down rates, then you must accept all cancellations as a breakthrough results in a reduction in prices. For investments to continue and if we are to meet our target of 500 GW of renewable energy capacity, we need to ensure that previous contracts are honored, ”said Ashok Khurana, CEO, APP.

The Department of Energy did not respond to requests for comment emailed by The Indian Express.

Experts noted that in addition to the measures taken by the two states to renegotiate contracts, renewable energy producers have faced significant contributions from state discoms.


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