Andhra Pradesh Paves the Way for Clean Energy Growth with ICE Policy 2024

The Andhra Pradesh government has introduced the Integrated Clean Energy (ICE) Policy, 2024 to accelerate the state's renewable energy transition. This policy provides a structured framework for clean energy projects, energy storage solutions,and green hydrogen initiatives.

The New and Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP), under the leadership of its Vice-Chairman and Managing Director (VC & MD), has formulated operational guidelines in consultation with industry stakeholders. The implementation of the policy has been entrusted to the VC and MD of NREDCAP, who will work in coordination with various state agencies and departments. Key agencies such as APTRANSCO, APGENCO, APSPDCL, APEPDCL, APCPDCL, and Andhra Pradesh Solar Power Corporation Ltd. will oversee different aspects of execution, while departments including Revenue, Finance, Industries, Water Resources, and Environment will play a crucial role in facilitating approvals and infrastructure development.

The policy aligns with national renewable energy initiatives and is in coordination with the Ministry of New and Renewable Energy (MNRE) and the Ministry of Power, Government of India.

With the aim of positioning Andhra Pradesh as a leader in India's renewable energy transition, the AP ICE Policy 2024 seeks to leverage the state's extensive solar, wind, hydro, and energy storage potential. A significant focus is placed on establishing Andhra Pradesh as a global hub for green hydrogen exports, ensuring both energy security and economic growth. The policy supports various projects, including clean energy generation, renewable energy manufacturing, battery storage, and electric vehicle charging infrastructure (EVCI).

To streamline the approval process, NREDCAP will establish a Unified/Single Desk Portal, where developers will submit their applications. This portal will generate a Unique Project Identification Number (UPIN) to track project progress and approvals across government departments. Additionally, quarterly status reports will be submitted to the Energy Department to maintain transparency and accountability. NREDCAP has been authorised to approve projects up to 40 MW for solar, wind, and hybrid projects and 25 MW for small hydro projects. Projects exceeding these limits, as well as strategic initiatives such as Green Hydrogen, Biofuels, Battery Energy Storage Systems (BESS), and Renewable Energy Manufacturing, will require approval from the State Investment Promotion Committee (SIPC), the State Investment Promotion Board (SIPB), and the Government of Andhra Pradesh (GoAP). Additionally, BESS projects with a capital expenditure below INR 100 crore will be approved by NREDCAP.

The policy outlines a structured approach to land allocation, categorising land into government, private, and forest land. Developers are responsible for securing private land, while NREDCAP and district authorities will verify and allocate government land. For projects requiring forest land, developers must apply through NREDCAP, with all costs borne by them. High-value projects such as green hydrogen, RTC energy storage, hybrid co-located projects, and pumped storage plants will be prioritised for development. In addition, Renewable Energy Manufacturing Zones (REMZs) will be established near ports to support solar PV, wind turbine, and battery manufacturing.

The policy also specifies lease pricing for different clean energy sectors. For general clean energy projects, the lease rate is INR 31,000 per acre per year, with a 5 percent escalation every two years. For biofuel projects, the lease is set at INR 15,000 per acre per year, with the same 5 percent escalation every two years. The highest lease rate applies to Green Hydrogen Hubs at Ports, which will be charged at INR 100,000 per acre per year.

Under the APERC (Green Energy Open Access) Regulation, 2024, developers will be responsible for covering the costs associated with interconnection metering, operation, maintenance, and testing. Coordination with the State Transmission Utility (STU) is mandatory for power evacuation. Developers will have the option to apply for Green Energy Open Access (GEOA) in different categories, including long-term (5+ years), medium-term (1-5 years), and short-term (≤1 year), with corresponding processing fees at each level. The Andhra Pradesh State Load Dispatch Centre (APSLDC) will handle short-term applications, while STU will oversee medium- and long-term applications.

The policy introduces a monthly energy banking cycle, with a 5 percent peak grid demand cap, which translates to 700 MW for FY 2024-25. Developers who wish to migrate their projects from previous policies will have six months to do so, subject to verification by NREDCAP, DISCOMs, and APTRANSCO. Any project transfer will require a tripartite Capacity Transfer Agreement along with approvals from SIPC, SIPB, and GoAP. The policy also allows for timeline extensions of up to six months, with an extended period of 12 months for pumped storage projects, though penalties will apply.

The AP ICE Policy 2024 establishes a transparent framework for clean energy project approvals, land allocation, and power evacuation, with a strong emphasis on green hydrogen, energy storage, and renewable energy manufacturing. It places developers in charge of interconnection metering, ensuring they cover the necessary processing fees for Green Energy Open Access. Energy banking will follow a monthly cycle with a peak grid demand cap in place. Developers seeking incentives will be required to apply via the Unified/Single Desk Portal, where they can avail themselves of benefits such as capital subsidies, electricity cost reimbursements, and duty exemptions.

With its structured approach to land allotment, open access, and interconnection metering, the AP ICE Policy 2024 sets Andhra Pradesh on a clear path toward becoming a national and global leader in clean energy deployment.