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Bloomberg
India’s Andhra Pradesh has asked developers of all renewable energy projects in the southern state to cut the price of green power and disregard existing contracts, according to people with knowledge of the matter.
The state’s power utility sent letters to developers including Goldman Sachs Group-backed ReNew Power Ltd, Greenko Group, Mytrah Energy Ltd, and Acme Cleantech Solutions Pvt, the people said, asking not to be identified as they aren’t authorised to speak to the media.
Auctioneers, state-owned power generator NTPC Ltd and Solar Energy Corp of India, have also been served notices asking them to reduce tariffs for 1.65 gigawatts of projects in the state to match a record low price of 2.44 rupees a kilowatt-hour.
The move comes after Andhra Pradesh cited the poor financial health of its power distribution companies and expressed an inability to afford high-priced wind and solar projects.
As a beginning salvo, Andhra Pradesh decided not to enter into power purchase agreements for upcoming green projects earlier this month.
Renegotiating prices could adversely impact Prime Minister Narendra Modi’s goal of installing 175 gigawatts of renewable capacity by 2022.
The South Asian nation has awarded some of the world’s lowest green energy tariffs and became the biggest auctioneer of solar and wind capacity last year, according to Bloomberg NEF.