The Indian state of Andhra Pradesh has agreed to enter perhaps the largest solar power purchase agreement with the Solar Corporation of India (SECI).
The power distribution utilities of Andhra Pradesh have secured approval from the state regulator to procure 7 gigawatts of solar power from projects auctioned by SECI. Power will be supplied in tranches between September 2024 and September 2026.
Distribution utilities will supply this power to over 1.8 million farmers for nine hours a day free of cost. Currently, these utilities supply power to farmers at Rs 4.36 ($0.056) per kilowatt-hour. The utilities had earlier planned to procure 10 gigawatts of solar power through auctions. These projects were supposed to be set up a solar power park within the state.
The state government had issued a 10 GW tender in January 2021 and had received bids for 6.4 gigawatts of capacity from a number of leading project developers. However, the tender ran into legal trouble and was eventually quashed.
By procuring power through SECI, Andhra Pradesh is expected to save Rs 2.3 billion ($304 million) in solar park and transmission infrastructure development costs. SECI will reportedly supply power from the 12 gigawatts of solar power capacity it allocated to Adani Green Energy and Azure Power under the manufacturing-linked power generation tender. Apart from power generation capacity, Adani Green Energy and Azure Power are required to manufacture 2 gigawatts and 1 gigawatt of solar modules.