Dateline: Amaravati | October 1, 2025
Lead
A massive 7,000 megawatt (MW) solar power supply agreement between Adani Green Energy Ltd. and the Andhra Pradesh government has run into serious trouble after the state demanded a waiver of inter-state transmission charges. The dispute has created uncertainty over one of India’s largest renewable energy projects and could have significant political and financial implications.
Background of the Deal
In July 2020, Adani Green signed an agreement with the Solar Energy Corporation of India (SECI) to supply 8,000 MW of solar power. Of this, nearly 7,000 MW was earmarked for Andhra Pradesh through the Power Purchase Agreement (PPA). The deal was touted as a landmark in India’s clean energy transition, with the potential to make Andhra Pradesh a renewable energy hub.
The state government, however, is now pressing the Union Ministry of Power to waive inter-state transmission charges, which account for a significant portion of the final tariff. Officials in Amaravati argue that the waiver is crucial to making the project economically viable for the state and its consumers.
The Transmission Fee Dispute
At the heart of the conflict lies the question of whether such a waiver can legally be granted. The Central Electricity Regulatory Commission (CERC) has laid down specific conditions for waivers, and experts warn that arbitrary exemptions could set a precedent affecting power markets across India.
A senior energy official in Andhra Pradesh explained:
“Without a waiver, the landed cost of power rises sharply, making it difficult for the state to purchase in bulk. With a waiver, electricity becomes affordable for farmers and households. This is not just economics but politics.”
Adani Green, on its part, has so far refrained from public comment, though sources within the company suggest that the firm is wary of any renegotiation that could jeopardize financial commitments made to lenders.
Political Reactions
The issue has quickly taken on a political dimension. The ruling TDP-BJP alliance in Andhra Pradesh insists it is standing up for the people’s interests, while opposition YSRCP has accused the government of mishandling energy policy.
Former Chief Minister Y.S. Jagan Mohan Reddy alleged that the state’s indecision could “scare away investors” and warned that “renegotiating deals midway will send a negative signal to the global renewable energy sector.”
Meanwhile, union leaders representing farmers and small industries have staged protests demanding cheaper power tariffs, intensifying the pressure on Chief Minister Chandrababu Naidu.
Expert Analysis
Energy analysts note that the case reflects a larger tension in India’s renewable energy landscape: how to balance ambitious clean energy targets with the financial realities of state electricity distribution companies (discoms), many of which are debt-ridden.
Dr. Arvind Subramaniam, an energy economist, commented:
“This is not just about Adani or Andhra Pradesh. Almost every state is struggling with high tariffs and weak discoms. If Andhra wins a waiver, other states will demand the same. It could unravel the financial discipline painstakingly built over the last decade.”
Economic and Social Impact
If the deal collapses, Andhra Pradesh risks losing a large chunk of its planned renewable capacity, potentially increasing its reliance on coal. This would undermine India’s national target of installing 500 GW of renewable energy capacity by 2030.
On the other hand, if the waiver is granted, the state could benefit from lower tariffs, helping farmers and small businesses that have long complained of erratic and expensive power.
Local residents in Anantapur and Kurnool districts, where large solar parks are located, worry about stalled projects. “We were promised jobs and better infrastructure. Now everything seems uncertain,” said Ramesh Reddy, a villager from Kurnool.
The Road Ahead
The Union Ministry of Power is expected to take a decision in the coming weeks. Legal experts suggest that the matter may eventually end up in the courts if either side refuses to budge.
For Adani Green, the episode comes at a time when the company is aggressively expanding its renewable portfolio and attempting to reassure investors after recent controversies. For Andhra Pradesh, it is a test of whether the state can balance populist promises with the financial and contractual discipline required to attract global energy giants.
Conclusion
As the standoff intensifies, the Adani-AP solar deal has become more than a corporate agreement; it is now a test case for India’s renewable energy policy and the politics of affordable electricity. Whether the Centre intervenes with a compromise or lets the dispute play out will shape not only Andhra Pradesh’s power future but also investor confidence in India’s clean energy journey.
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