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Though Andhra Pradesh has the potential to generate 14,497 MW of wind power at 80 metre height, it is able to utilise the capacity to generate just 245 MW.

This is due to lack of initiative from the state government and the decision of the Centre for Wind Energy Technology to withdraw concessions to industrialists who want to set up wind power projects.

Currently, the state is purchasing power at Rs 10 to Rs 15 a unit as part of short-term power purchase agreements, while the recommended price of wind power is just Rs 5.42 a unit. Thus, the government can save power and money on short-term purchases of wind power. The Centre for Wind Energy Technology had recommended Rs 5.42 per unit for wind power but APTransco and Discoms are willing to pay only Rs 3.50 to Rs 4.20 per unit. Given the lower PLFs for wind in the state, this tariff might not be enough for industrialists to invest in wind.

The low rate is discouraging industrialists from setting up wind power plants.

Compounding the problem, the Centre withdrew the Accelerated Depreciation (AD) and Generation Based Incentive (GBI) for wind power plants.

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