India: New, Potentially Helpful Wind And Solar Power Policies In Andhra Pradesh

Last Updated: 23 October 2015
Article by   Trilegal

The Government of Andhra Pradesh last week released new solar and wind power policies replacing the previous solar and wind policies of 2012. If implemented well, these policies could significantly de-risk development phase projects as they potentially provide for quick, time bound and simplified processes for obtaining requisite consents and approvals, offer fiscal incentives and simplify the land acquisition process.

The Government of Andhra Pradesh (GoAP) last week released new solar and wind power policies replacing the previous solar and wind policies of 2012. The new policies are intended to provide an impetus to the development of renewable power projects in the state and to attract private investment. In the solar power sector alone, the GoAP is aiming to add a minimum of 5000 MW in the next 5 years.

The new policies will be valid for 5 years (Operative Period). All solar and wind power projects commissioned during the Operative Period will be covered by the new policies (including projects which are currently under construction). The new policies also allow for migration from the old policies to the new policies for solar projects commissioned after 30 June 2014 and wind projects allotted but not yet commissioned. Most of the benefits under the new policies apply for a period of 10 years from the date of commissioning.

The new polices allow developers to sell power to the AP Discoms, captive consumers or third parties, located within or outside the state. However, the incentives offered vary depending upon the power offtaker. If implemented in accordance with their terms, the new policies could de-risk development phase projects as they potentially provide for quick, time bound and simplified processes for obtaining requisite consents and approvals, provide fiscal incentives and simplify the land acquisition process.


Some of the key incentives and benefits under the new policies have been listed below:

(a) Exemption from paying supervision charges to the distribution companies of Andhra Pradesh (AP Discoms) or the State Transmission Utility, APTRANSCO towards construction of internal power evacuation infrastructure;

(b) Exemption from paying transmission/distribution charges to wheel electricity to captive and third party HT-I category consumers located within the state;

(c) Exemption from paying electricity duty if power is sold to AP Discoms;

(d) Exemption from paying cross subsidy surcharge for a period for 5 years from the date of commissioning for solar projects;

(e) 100 % banking of electricity throughout the year;

(f) Disposal of applications for power evacuation and grid connectivity within 14 days. Any strengthening of upstream transmission lines/evacuation infrastructure to be done on a priority basis;

(g) Intra-state open access for the entire tenure of the PPA. Deemed open access will be granted if applications for open access are not disposed of within 21 days;

(h)Deemed PPP status for projects selling power to AP Discoms;

(i)Deemed Non-Agricultural status for land parcels acquired to set up the projects;

(j)Deemed industry status to take advantage of incentives available to industries;

(k)Deemed 'must run' status for the purposes of scheduling of power to the grid;

(l)Exemption from obtaining NOC (Consent to Operate/Consent to Establish) from AP Pollution Control Board;

(m)Solar projects set up in solar parks located within the state to be eligible for all incentives provided by the Central Government under the National Solar Mission or any other scheme;

(n)Single window assistance from the nodal agency (NREDCAP) to acquire land required to set up a project; and

(o)The Revised Policies also provide incentives for developers setting up roof-top solar projects or those considering repowering their existing wind power projects.

Apart from capacity addition, the Revised Policies also seek to promote investment to set up manufacturing facilities in the state to cater to the wind and solar power sector.


The amendments brought about by the new policies fall under three categories. First, by reducing certain costs and charges currently payable to various statutory bodies. Second, setting out clear and short timeframes to provide key approvals such as power evacuation and open access, with deeming provisions for applications not disposed of within a specified time period. Third, various deemed approvals for renewable energy projects such as, PPP status, land use conversion, industry status and environment related approvals.

If the GoAP does indeed follow the terms of the new policies, developers should gain significant clarity and comfort on key issues which have in the past been causes for delay and uncertainty in developing renewable energy projects in the state and elsewhere in India.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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