The High Court of the state of Andhra Pradesh (“High Court”) on March 15, 2022, ruled in favour of ReNew Power (“ReNew”) and other renewable energy companies, with regard to the attempt by the Andhra Pradesh power distribution companies (“AP Discoms”) to renegotiate tariffs under existing power purchase agreements (“PPAs”). The High Court has held that tariffs under existing PPAs cannot be altered unilaterally by the parties.
Further, the High Court has directed the AP Discoms to pay all past outstanding dues (at full tariff). In addition, the High Court has also reaffirmed the “must-run” status of renewable energy projects and ruled that any curtailment of generation, except for grid safety, is not permitted.
As of December 31, 2021, out of Renew’s total receivables of INR 51,713 million (US$ 695 million), receivables from the AP Discoms were INR 16,879 million (US$ 227 million).
The AP Discoms can choose to appeal the High Court’s order before the Supreme Court of India, which has the discretion to admit the appeal or to deny it.
Speaking on the judgement, Mr Sumant Sinha, Chairman and CEO, ReNew said, “This judgement, along with rulings by other courts in India, illustrates sanctity of contracts in India. We look forward to working together with the Government of India and all states to help the country realize its climate targets, including producing 500 GW of clean energy through non fossil resources by 2030.”
