Andhra Pradesh High Court quashes state's 6.4-Gw solar project tender

Adani Green Energy in February won five mega solar power projects of 600 megawatt each under the tender

The Andhra Pradesh High Court on Thursday held that the state had awarded solar power tenders in contravention of the Electricity Act, 2003, and quashed the request for selection (RfS) and power purchase agreement (PPA) for procuring 6.4 Gw of solar power projects.
 
Tata Power Renewable Energy had moved the HC challenging the RfS and PPA issued by the Andhra Pradesh Green Energy Corporation (APGECL) in January 2021.
 
Adani Green Energy (AGEL) in February won five mega solar power projects of 600 megawatt (Mw) each under the tender. State-owned NTPC won 600 Mw in the auction, quoting the lowest tariff of Rs 2.48 per kWh (unit). The lowest tariff discovered in the whole auction process was Rs 2.47 a unit by Torrent Power for a 300 Mw solar project. The award of tender was put on hold.

 

Sources said the bidding process might undergo revision as both the RfS and PPA were quashed. A copy of the order was not available till the time of going to press. “The High Court has now advised the government of Andhra Pradesh that in case it wishes to procure power, the bidding documents must be in accordance with the Act as well as the guidelines framed thereunder and in case of any deviation, such deviations must be approved by APERC,” said a senior lawyer.
 
Industry sources said the PPA by APGECL mentioned that any dispute regarding the project would be settled by the state government, as against the legal requirement of moving the state or central electricity regulator. The APGECL had continued with the tendering process despite the legal challenge.

 
Shri Venkatesh, SKV Law Offices representing Tata Power said, "Electricity Act, 2003 is a complete code and issues such as competitive bidding must be in terms of Act and the Regulator has an intrinsic role to play in such transactions. In this case however, AP had carved out a method outside the Act and also outside the scope and powers of Regulator, which in our view is not permissible. This is what has been held by the Hon'ble High Court as well."
 
The grid connected power is to be generated at 10 solar parks in Andhra Pradesh under the tender. The plants are planned to be built in the districts of Kurnool, Ananthapuramu, Prakasam, and Kadapa.

 
The tender received significant investor interest despite the state government cancelling all prior renewable energy contracts in 2019, citing high tariff and malafide intentions. Close to 10 Gw of solar and wind power projects in the state were hit by this decision.