The Central Electricity Regulatory Commission (CERC) has dismissed a review petition filed by the Solar Energy Corporation of India (SECI). The petition had asked for the review of the commission’s previous order on a petition filed by Welspun Energy Private Limited (WEPL) regarding a 100 MW solar project in Maharashtra.
Background of the case
SECI had issued the Request for Selection (RfS) for the selection of developers for the development of 500 MW of solar projects on Build, Own, and Operate (BOO) basis in the state of Maharashtra.
Subsequently, Welspun was awarded 100 MW of projects, and it signed a PPA with SECI on April 10, 2016.
During the implementation of the projects, certain issues arose between the parties, and later, Welspun filed a petition for the resolution of disputes regarding the PPA.
Welspun Energy had asked the Commission to restrain SECI from terminating the PPA and direct it to permit the assignment of the PPA to Giriraj Renewable Private Limited instead.
In its petition, Welspun had also requested the Commission to direct SECI to extend the scheduled commissioning date (SCoD) of the projects. The land procurement issues faced by the company could be considered similar to “force majeure” conditions.
The Commission allowed the extension to the projects, as reported previously by Mercom. As 28 MW of solar projects were already installed, synchronized, and commissioned, the commission had agreed to extend the deadline for the balance 72 MW capacity by 90 days.
After this order, SECI decided to file a petition seeking the review of the order.
SECI’s arguments can be broadly categorized as the following:
- SECI did not recognize land acquisition issues as “force majeure” like events in the PPA and the consequent extension of the scheduled commissioning on this ground
- Recognition of part-commissioning (28 MW) for a capacity less than 50% of the total capacity is contrary to the PPA, RfS and the guidelines
- SECI also questioned the change in shareholding pattern and substitution of Welspun with Giriraj Renewable
For the first objection, the commission observed that the delay in the present case was beyond the control of Welspun and was caused due to a government delay that was akin to “force majeure.” As a result, the commission extended the time for the scheduled commissioning.
Regarding the part commissioning of the project, the Commission noted, “It is an admitted fact that 28 MW capacity of the project has been synchronized with the grid with effect from April 2018 while balance 72 MW is yet to be commissioned. In fact, from April 16, 2018, and until the date when the order in this petition has been reserved, the situation of injecting 28 MW into the grid remained unaltered. Having already commissioned 28 MW, we are satisfied that the petitioner intends to continue with the installation of the balance 72 MW.”
After signing the PPA, Welspun was demerged as Giriraj Renewables Private Limited due to the internal restructuring, and the demerger was sanctioned by the National Company Law Tribunal (NCLT). After taking into consideration the order by the NCLT, the Commission noted that SECI is only re-agitating the issues, and there is no error apparent on the face of the order by the NCLT.
Previously, Mercom reported that land acquisition, transmission, and acquiring approvals remain a challenge in commissioning large-scale projects on time.
Rakesh is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). More articles from Rakesh Ranjan.