Andhra Pradesh Chief Minister YS Jaganmohan Reddy, who has shuffled his top bureaucracy, has shunted out two bureaucrats handling the power sector in the State.

Shortly after being sworn in Chief Minister, Reddy had hinted that he would review the various power purchase agreements entered into by the State utilities with wind power producers. Developers and independent power producers are in a quandary over the move.

Ajay Jain, Principal Secretary, Energy and Infrastructure, who was handling sensitive portfolios and overseeing Capital Region Development Authority, and K Vijayanand, Managing Director of AP Genco, have both been directed to report to the General Administration Department.

Cost variations

Over the past few years, wind power generation procurement cost has come down and the lowest quoted a year ago was ₹2.42 per unit, when there was equipment glut. However, a few years ago, the average cost of power procurement varied from ₹4.50 to ₹6 a unit.

During the N Chandrababu Naidu rule, the State Discoms and Transco were keen that the power developers consider bringing down the cost by renegotiation of power purchase agreements.

Renewables capacity

The State has about 7 giga watts of installed capacity of renewable energy projects with wind energy accounting for a little over 4 GW and solar about 3 GW. The aim is to develop about 8 GW of wind power by 2022. After Jagan took over as the Chief Minister he had made it clear that he would look into the tariffs offered to wind power sector as he felt that the tariffs were much higher than the open market rates.

As the Opposition leader, Jagan had pointed out that agreements were signed with developers indiscriminately and the tariffs were high.

Meanwhile, most of the developers are awaiting the next move as the bankability of their projects is based on certain tariffs offered at the time of implementation.

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