Andhra Pradesh To Procure 7,000 MW from SECI for Free Agri Power Scheme

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In a statement, Energy minister, Balineni Srinivasa Reddy said that the government will procure about 7,000 MW of solar power from Solar Energy Corporation of India (SECI), starting 2024, in different tranches to meet the demand of 18 lakh farmers.

The State Cabinet has approved the proposal to enter into an agreement with SECI to procure 7,000 MW solar power for providing free nine-hour power to farmers.

The agreement will be signed for supply of power at Rs 2.49 per unit for 25 years on a sustainable basis. The decision to procure power from SECI at Rs 2.49 per unit for 25 years is estimated to bring the burden down on the state exchequer by Rs 4,000 crore per annum, said Information and Public Relation Minister Perni Venkataramaiah (Nani).

“To provide free and quality power in the day-time to farmers on a sustainable basis, and to ensure that the free power initiative does not become a burden to the government, the Cabinet has cleared the proposal to enter into an agreement with SECI for procurement of 7,000 MW annually,” the minister said after the Cabinet meeting. In a press release later, the government said that Rs 2,000 crore would be the estimated savings per annum.

in September, Andhra Pradesh government had agreed to procure 9 GW of solar power from SECI under the manufacturing-related solar bidding initiative.

SECI had written to the Andhra Pradesh government asking to procure 9 GW of solar capacity to be set up in the years 2024, 2025, and 2026 in three tranches of 3 GW each.

According to the sources, SECI has proposed this as a suitable alternative to the state government’s 6.4 GW of PV bid which ran into legal complications.

SECI stated that under a manufacturing-related power supply agreement (PSA), the state will provide electricity at Rs 2.49 / kWh, and the entire 25-year power purchase agreement will be exempt from interstate transmission system (ISTS) charges.

SECI explained that between December 2019 and June 2020, a 12 GW project was awarded for four tranches, 3 GW each, under a manufacturing-linked solar bid.

The balance 9 GW will be set up in three phases 3 GW each and will be ready in September 2024, September 2025, and September 2026, respectively.

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