The Appellate Tribunal for Electricity (APTEL) has directed the Gujarat Urja Vikas Nigam Limited (GUVNL) to extend the validity of bids placed by developers in its scrapped 700 MW solar auction by two weeks.
It also directed the state distribution company (DISCOM) not to allocate the capacities awarded to the developers to third parties if it decided to float the 700 MW tender again.
SJVN Limited, Tata Power, TEQ Green Power (a subsidiary of O2 Power), and Vena Energy Renewables had filed petitions with APTEL seeking relief following GUVNL’s decision to reissue its 700 MW solar tender. The developers had given GUVNL the option to keep bids valid for one week until APTEL decided.
Commenting on the order, attorney Aditya K Singh of Link Legal India Law Services said, “APTEL has taken the right step by giving interim relief to developers. Ideal relief should have been a complete stay on the tender. However, APTEL must have found it difficult because of the findings of APTEL in the order pronounced in Appeal Number 22 of 2016 (SunEdison Solar vs. DERC & Others). In the SunEdison case, Delhi DISCOM BSES had withdrawn its tariff adoption petition filed on the grounds of a significant reduction in solar power cost (a letter of intent was also issued to SunEdison). APTEL allowed the cancelation of the bidding process heavily relying on the term “consumer’s interest.”
Aditya further added, “APTEL should take this opportunity to lay down the law on the sanctity of the bidding process, and it should in clear terms spell out when “right to supply” gets vested in the developer. I had the opportunity to appear before APTEL in the SunEdison matter and unsuccessfully pleaded before APTEL that after the issuance of letter of intent and filing the petition before the Commission, the Appellant has got vested right to supply energy.”
“APTEL can differentiate the present dispute from that of SunEdison’s on the ground that the terms of the issuance of award are different (in SunEdison’s case, the letter of intent was issued, and in the present case, the letter of award has been issued). Further to adjudicate, the current set of dispute assistance of bidding guidelines must be taken which was not in existence at the time of the adjudication of the SunEdison dispute,” Aditya said.
“APTEL has an opportunity to give confidence to the investors by holding that moving of goalposts is not allowed. If APTEL finds that its’ previous order (SunEdison) comes in its way for dissension of justice, it should consider constituting a larger bench and give a verdict in favor of regulatory certainty,” Aditya opined.
In GUVNL’s auction for 700 MW of solar projects at the Dholera solar park (Phase IX), Vena Energy Renewables and Tata Power quoted a tariff of ₹2.78 (~$0.0380)/kWh for 100 MW of projects each. ReNew Solar quoted ₹2.79 (~$0.0381)/kWh for 200 MW, and SJVN quoted ₹2.80 (~$0.383)/kWh for 100 MW. TEQ quoted ₹2.81 (~$0.384)/kWh for 500 MW of projects but was awarded only 200 MW under the bucket filling method.
However, the Gujarat Electricity Regulatory Commission (GERC) had allowed GUVNL to cancel the auction and retender it to discover a lower tariff for the projects.
The industry severely criticized this move since the tender was scrapped over five months after the auction was concluded and letters of award were issued. The state DISCOM wanted to discover lower tariffs in another auction.
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Nithin is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai. More articles from Nithin.