With a view to encouraging wind power projects in the state, the Andhra Pradesh government has hiked tariff for wind power projects from the current Rs 3.37 per kwh (fixed in 2004) to Rs 3.50 per kwh. The hike in tariff also aims to counterbalance the increasing cost of steel, an important raw material in wind energy generators.
The coastal state has a gross wind energy potential of 8,275 mw out of which 1,750 mw is technically feasible. As of December 2007, the state's installed wind power capacity was only 122.5 mw, implying grossly under-utilised potential. Central Wind Energy Institute (C-Wet) has identified 30 locations for wind power development, spread over Ananthapur, Kurnool, Cuddapah, Chittor and Nellore districts. Ananthapur accounts for the highest wind power potential in Andhra Pradesh.
Wind turbine manufacturers like Suzlon Energy and Enercon (India) Ltd have also proposed to set up wind farms in the district. Earlier this year, ICSA (India) also proposed to set up a 20-mw wind power project in Ananthapur district.