New wind and solar power policies in Andhra Pradesh

The government of Andhra Pradesh recently released new solar and wind power policies replacing the 2012 policies. 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 government is aiming to add a minimum of 5,000 megawatts in the next five years.

These policies will be valid for five years and all solar and wind power projects commissioned during this period will be covered by them (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 these policies apply for 10 years from the date of commissioning and allow developers to sell power to the distribution licensees in Andhra Pradesh (AP discoms), captive consumers or third parties, located within or outside the state. However, the incentives offered vary depending on 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 to obtain consents and approvals, provide fiscal incentives and simplify the land acquisition process.

Akshay Jaitly is a partner at Trilegal and Vishal Binod is an associate. Trilegal is a full-service law firm with offices in Delhi, Mumbai, Bangalore and Hyderabad.