Adani Asked to Compensate for Delay in Land Possession for a 20 MW Solar Project

The Karnataka Electricity Regulatory Commission (KERC) has dismissed Adani Green Energy Limited’s (AGEL) request to approve the date on which the supplemental power purchase agreement (PPA) was signed to be the effective date of the PPA for a 20 MW solar project.

On October 14, 2016, the Commission had approved the PPA executed between BESCOM and Adani Green for a 20 MW (AC) solar power project in Holenarasipura taluk of Hassan district. The Commission had noted that this would be treated as the effective date for the PPA of the project.

The Commission also stated that the petitioner (Adani) had failed to furnish the acceptable documentary evidence establishing the title and the possession of the project land on time. The Commission added that Adani Green is liable to pay damages to the respondents and is not entitled to any relief it had sought in the petition.

AGEL had filed a petition with KERC stating that it had been prevented from performing the obligations under the PPA due to force majeure (unforeseeable) events. It had also requested the Commission to grant approval to the supplemental power purchase agreement dated December 17, 2016, and to declare that the effective date would be the date on which the supplemental agreement received the approval.


Background

Karnataka Renewable Energy Development Limited (KREDL) had called for the Request for Proposal (RfP) for the development of 290 MW of solar projects to be implemented in 17 taluks on February 12, 2016.

AGEL was the selected bidder to develop a 20 MW project in Holenarasipura taluk of Hassan district. The tariff discovered was ₹4.79 (~$0.065)/kWh.

Later, AGEL and Bangalore Electricity Supply Company Limited (BESCOM) entered into a PPA on June 29, 2016, which was approved by this Commission.

The project was commissioned on October 13, 2017. However, AGEL could not achieve the timeline set for presenting the documentary evidence of the possession of land required for the project.

BESCOM, in its response, had stated that the land acquisition and the land conversion detail had not been furnished by AGEL, so a penalty would be levied as per the terms and conditions of the PPA.

Also, Adani had asked the Karnataka Power Transmission Corporation (KPTCL) for a tentative evacuation plan for a substation at Holenarasipura taluk in Hassan district.

Then, after nearly a month on August 31, 2016, AGEL asked it not to process the application as it wanted to change the location of the project. AGEL did not mention any change in the location for nearly eight months, and later, in May 2017, it notified KPTCL regarding the change in place of the proposed solar power project from the Kadvaninakote substation to Bandishettyhalli substation in Holenarasipura taluk.

After this, Adani asked to carry out the load flow study and to grant the evacuation approvals to the 66/11 kV Bandishettyhalli substation.

The Commission, in its order, noted that Adani had not explained the delay in identifying the land and also failed to establish that it could produce the acceptable documentary evidence confirming the possession of the land required within the prescribed period.

Though Adani produced documents later evidencing the lease, conversion and purchase of certain lands, and the sale deed. “However, it cannot be ascertained that these documents relate to the lands in respect of each consent letter,” stated the order.

The Commission also noted that AGEL is liable to pay damages as defined in the PPA, and at the same time, is not entitled to any of the relief claimed in the petition.

Recently, the state commission dismissed a petition by Shorapur Solar Power Limited that argued its 10 MW solar project was delayed due to force majeure events. Due to the delay, the Commission ordered that the petitioner is entitled to a tariff of ₹4.36 (~$0.061)/kWh in place of the originally agreed tariff of ₹5.13 (~$0.071)/kWh. The Commission also directed Shorapur Solar Power Private Limited to pay liquidated damages to Chamundeshwari Electricity Supply Corporation Limited (CESC) in line with the power purchase agreement.

In October last year, KERC had ruled against a petition filed by the special purpose vehicles of SunEdison Energy requesting the extension of the scheduled commercial operation date for solar projects totaling 150 MW on the grounds of force majeure events.