Andhra Pradesh government on Friday said it would get an additional revenue of Rs 3,495 crore from the proposed Integrated Renewable Energy Project (IREP) after it renegotiated the contract terms with the implementing firm Greenko Group.
As part of the IREP, the Hyderabad headquartered Greenko Group is currently setting up a 550 megawatt (MW) wind power project, 1,000 MW of solar energy project and 1,680 MW of reverse pumping project in the state.
“This significant financial gain is achieved owing to the efforts of the present government which has renegotiated the project terms and compensation payable by the Greenko group which is currently setting up this project in Andhra Pradesh,” an official statement said.
As a result, the state stands to receive an additional revenue of Rs 3,495 crore from the proposed project. “It is purely additional to the already agreed proceedings of the erstwhile government,” it said.
As per the renegotiations, the state government said it has doubled the land prices to Rs 5 lakh per acre from the existing Rs 2.5 lakh the rate which was fixed by the erstwhile TDP government.
This decision will alone fetch the state government about Rs 119.16 crore which is equivalent to the one-time compensation fixed by the previous TDP government, it said, and added the government will allot 4,766.28 acres of land to Greenko group for setting the proposed project.
In addition to this, the government has also levied a ‘Green Energy Development Charge/Cess’ of Rs 1,00,000 per annum on each megawatt of power being produced by the group in all the three formats wind, solar and reverse pumping project.
While this charge/cess will be applicable for the first 25 years, Greenko group has to shell out Rs 2,50,000 per megawatt per annum thereafter until the operating life of the respective projects. This itself would provide Rs 32.30 Crore per annum to the state’s exchequer, it said.
The government has also decided to alter the compensation terms which will immensely benefit the state and its economy.
It may be recalled that the previous TDP government had agreed to receive a one-time compensation of Rs 119 crore from the Greenko Group.
“Owing to the efforts of the present government, the compensation to the state’s exchequer has increased significantly as we have achieved a recurring annual benefit of 27 per cent over the one time compensation fixed by the previous government,” said A Jeya Kallam, Principal Advisor to the Chief Minister.
He said the proposed project would reduce the intermittency associated with renewable energy generation. The success of this project would promote renewable energy generation in a big way in the state of Andhra Pradesh.
The government said that it is imperative to promote renewable energy generation projects while discouraging the traditional thermal power generation plants in view of the environmental concerns and also for sustainable development.
However, due to the intermittent nature of renewable power that would not be entirely possible unless a feasible storage solution is available, it said.
The proposed reverse pumping project by Greenko would reduce this dependency to some extent. And this project is developed on the lines of a hydroelectric project and would have a very long life of operations. Globally there are some projects which have surpassed 100 years of operations, it added.