"Andhra Pradesh Adopts Cautious Approach to Adani Green Energy Project".

The Andhra Pradesh government, led by Chief Minister N Chandrababu Naidu, known for his quick decision-making, is adopting a measured approach regarding electricity supply from the now-controversial Adani Green Energy project.

The State Cabinet reportedly discussed the status of the power supply agreement between the State’s Discom and the Solar Energy Corporation of India (SECI) during a meeting earlier this month. SECI has power purchase agreements with Adani Green, which was set to begin supplying power next year.

“We are aware of the challenges. As of now, no decision on the contract has been communicated,” said a source familiar with the situation.

The state faces a complex dilemma. Canceling the project could result in a significant financial burden, requiring payments of nearly ₹2,800 crore annually for 25 years. On the other hand, continuing with the agreement would mean retail consumers bearing additional costs of 80 paise to ₹1 per unit of power due to the geographical network access component. The contract stipulates an initial supply of 3 GW of renewable energy to the State Discom in 2024, another 3 GW in 2025, and 1 GW in 2026.

Political Backdrop Intensifies

The controversy over electricity has become a political flashpoint in Andhra Pradesh. The ruling party and the Opposition have exchanged accusations over the state’s power policies. Energy Minister Gottipati Ravi Kumar recently criticized former Chief Minister YS Jagan Mohan Reddy, accusing him of fostering protests against electricity charges.

Kumar highlighted that in 2019, Andhra Pradesh was a power surplus state but claimed that Reddy’s administration transformed it into a power-deficit state within five years due to poor decisions and alleged corruption. According to Kumar, the previous regime canceled power purchase agreements, intimidated renewable energy investors, and drove them out of the state, resulting in the loss of 10,000 MW of renewable energy capacity.

Additionally, Kumar alleged that AP-Genco’s financial health suffered under Reddy’s leadership. He claimed power was purchased at inflated prices ranging from ₹8 to ₹14 per unit when it was available at ₹5 per unit. The Andhra Pradesh Electricity Regulatory Commission (APERC) approved true-up charges during Reddy’s tenure, further burdening the public. These charges amounted to:

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  ₹3,082 crore for 2021-22₹6,073 crore for 2022-23

  
  


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  ₹9,412 crore for 2023-24

  
  

As the state grapples with its energy strategy, the Adani Green Energy project remains at the center of a heated debate, with significant implications for both the government and the public.

HBL