The YSR Congress party government led by chief minister Y S Jagan Mohan Reddy, which had to face a lot of criticism over cancellation of power purchase agreements with solar and wind power producers in its initial days, has now proved right in its decision.
The Jagan government has now finalised agreements with as many as 10 solar power producers, including big players like NTPC and Adani Group, for supply of solar power at an average cost of Rs 2.48 per unit. This is significantly lower than the tariff at which distribution companies are procuring power.
The state will now procure 14,000 million units of power at this rate from these power plants with total installed capacity of 6,400 MW. This will help the state to meet the free power supply requirement to farmers.
Since the state has to bear an annual burden of Rs 10,000 crore on free power supply, the cheaper power supply from these solar power plants would help the state in a big way, the officials said.
The officials recalled that during the Telugu Desam Party regime, PPAs were signed with solar power companies at exorbitant tariffs, at an average cost of Rs 5.20 per unit.
“Now, the present low tariff of Rs. 2.48 would result in a savings of nearly Rs 3,800 crores in the very first year and this savings is likely to increase over the years as the tariff would remain the same,” the officials said.
The present value of benefit accruing to the Andhra Pradesh Government exchequer over the life of this project can conservatively be estimated at Rs. 50,000 crores.
