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Andhra to buy solar power from SECI, supply to farmers for free

The Andhra government currently purchases power at Rs 4.36 per unit and provides it to 18.37 lakh farmers free of cost.

Experts noted that besides moves by the two states to renegotiate contracts, renewable energy producers have faced of large dues from state discoms.

The Andhra Pradesh government has announced that it will begin purchasing electricity from the Solar Energy Corporation of India (SECI) starting 2024, and will supply it to over 18 lakh farmers across the state for nine hours a day free of cost.

The agreement was completed after approval from the Andhra Pradesh Electricity Regulatory Commission, officials said. The Andhra government currently purchases power at Rs 4.36 per unit and provides it to 18.37 lakh farmers free of cost. To make this more sustainable, the government had planned to set up a 10,000 MW solar power project through the state-run Green Energy Corporation Limited (GECL) to get power at Rs 2.49 per unit for the next 25 years.

However, SECI offered to provide Andhra Pradesh with power at the same cost under its manufacturing-linked initiative from 2024, resulting in the state government dropping the idea of setting up a solar park exclusively for power supply to the farm sector.

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State Energy Secretary N Srikant said procuring solar power from SECI would be more affordable to take forward the initiative to provide the agricultural sector free power for nine hours a day for the next 25 years on a sustainable basis. According to officials, the tariffs proposed by SECI are the lowest in the country and the transactions would be transparent as it is a Central Public Sector Undertaking. Since September this year, neighbouring Tamil Nadu too has been buying power from SECI at Rs 2.69 per unit.

Officials said that the change of laws in Power Purchase Agreements (PPA), and state transmission charges, and Central transmission charges would affect the state’s solar project initiative. But by purchasing power through SECI, the state could save about Rs 2,260 crore, including the cost of power evacuation infrastructure.

To supply free power to farm sector, the state had upgraded agriculture feeders for Rs 1,700 crore. With the upgrade, the network will be able to handle the supply for the next 30 years — the period for which the government wants to extend the free power supply scheme. Free power was provided to 18 lakh farmers in the kharif and rabi seasons.

First published on: 15-11-2021 at 01:25:02 am
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