Andhra Pradesh Issues US$ 119 billion Integrated Clean Energy (ICE) Programme
In a bid to transform Andhra Pradesh into a clean energy hub and achieve net zero by 2047, the state government has issued its Integrated Clean Energy (ICE) policy on 17th October 2024. The policy with a control period of 5 years until 2029 envisages approximately Rs. 10 lakh crore (US$ 119 billion) of investment inflow and 160 GW of new installed RE capacity.
The policy looks to leverage the state’s vast renewable energy potential across wind, solar and hybrid sources, storage capabilities through pumped storage projects, a long coastline with ten operational and under development ports.
The policy offers a host of incentives for stakeholders looking to invest in the clean energy space in Andhra Pradesh. The incentives include subsidies on capital investment and power and land costs. ICE furnishes clarity regarding land acquisition with clear land lease guidelines for each clean energy technology. The policy also offers incentive on various open access charges such as transmission, wheeling, cross subsidy, electricity duty etc. details of which are provided in the table below.
Table: Targets and Incentives for various clean energy technologies under ICE 2024
Source: Government of Andhra Pradesh, JMK Research
To implement the policy, a new entity “New and Renewable Energy Development Corporation Of Andhra Pradesh (NREDCAP)” will be established which will act as the nodal agency.
The policy also promotes various emerging clean energy technologies such as offshore, geothermal, tidal, other oceanic energies, storage (other than PHS and BESS), carbon capture & sequestration etc. To kickstart their wide scale adoption, the government aims to provide Viability Gap Funding (VGF) or capital subsidy at 20% for the demonstration/ pilot projects with capacity not exceeding 5 MW with a maximum limit of INR 5 Crores/project.
In the past, despite having one of the highest renewable energy potentials in the country, Andhra Pradesh has failed to translate it into on-ground development. Stakeholders cited a lack of supportive ecosystem from the state government and the local DISCOMs for this. This new policy will unlock a huge opportunity for both commercial and industrial (C&I) consumers and independent power producers (IPPs) to develop and tap the renewable energy potential in the state.
The issuance of such a detailed clean energy transition policy by the Andhra Pradesh government is a positive development towards India’s attainment of its 2030 renewable energy goals. Eventually, the policy will help Andhra Pradesh realize its vast renewable energy potential to become a leading state for clean energy development and a global manufacturing and export hub.