Aperc makes 5% renewable energy mandatory

The orders will be for a period of three years

Ending the long wait of entrepreneurs, the Andhra Pradesh Electricity Regulatory Commission (Aperc) has finally come out with a non-conventional energy policy making it mandatory for every distribution licensee, including captive power and open access consumers, to buy 5 per cent of his total requirement from cogeneration or renewable energy sources.

Of this, 1.5 per cent of the total consumption in a year is reserved for procurement of wind-based energy. In its orders issued here today, the commission has summarily shut the doors for any further capacity addition in the biomass sector.

The above orders will be in force for a period of three years, during 2005-06 to 2007-08, according to a press release issued here today by Aperc secretary S Suryaprakash Rao.

While the orders pertaining to biomass power will not have any immediate impact as several of these projects that even entered into the power purchase agreements (PPAs) with APTransco have not been kicked off due to tariff problems, the quota fixation for the wind and other forms of renewable energy is expected to give a boost to this sector.

Inclusion of cogeneration into the renewable energy obligation is expected to help sugar mills that come under the cooperative sector and where the government is keen to set up cogeneration units in order to make them viable.

In the wind power sector, the Aperc's orders would provide a scope for at least 350 mw installed capacity in the state, according to K Srinivas, manager, Non-conventional Energy Development Corporation of Andhra Pradesh (Nedcap).

Request for PPAs with regard to 23.8 mw wind units, which have already been established has been pending with the APTransco as on March, 2005 as the state power utility was not inclined to enter into any understanding with the non-conventional energy projects citing absence of a policy. While the state is estimated to have a technical potentiality for 1,920 mw wind power capacity, so far units with a total capacity of 124 mw are in operation as compared to more than 2,000 mw wind power units in the neighbouring Tamil Nadu.

While the biomass power units with a total installed capacity of 207.75 mw are in operation, PPAs are in place for another 74.5 mw capacity. With the regulatory commission reducing the biomass power tariff from Rs 3.48 paise to Rs 2.88 paise a unit in April, 2005, capacity addition in this sector has slowed down, Nedcap officials said. Subsequently, the Andhra Pradesh High Court, which intervened into the matter, had issued interim orders directing the APTransco to pay Rs 3.18 paise that is still in vogue.

The APTransco has developed cold feet as far as biomass power is concerned since the relatively higher tariff of these units will increase its power purchase bills. With the Aperc's orders in place, entrepreneurs who want to enter this field may go ahead with their plans.

Sources said due to the delay in formulating a policy such as this, several private companies like Andhra Sugars and Nuziveedu Seeds have shifted their plans of establishing wind power units to Tamil Nadu.

According to Aperc orders, the distribution licensees, captive power and open access consumers will have to meet the renewable power purchase obligation from sources within the state only.

Power play

Every distribution licensee, including captive power and open access consumers, has to buy 5% of his total requirement from renewable energy sources

Quota fixation for the wind and other forms of renewable energy is expected to give a boost to the biomass power sector

In wind power sector, Aperc's orders would provide a scope for at least 350 mw installed capacity in the state