COVID-19 Impact: Deadline to Sign PPAs for Distributed Solar Projects Extended

The Gujarat Electricity Regulatory Commission (GERC) has extended the time limit for the execution of power purchase agreements (PPAs) between the state distribution companies (DISCOMs) and small-scale distributed solar project developers, to May 31, 2021, from April 30, 2021.

The Commission cited the prevailing Covid-19 pandemic crisis as the reason behind the timeline extension.

Background

Earlier, the Gujarat Urja Vikas Nigam Limited (GUVNL) and other DISCOMs had filed a petition with the Commission for incorporating the ‘change in law’ clause in the PPAs to be executed with the project developers under the ‘Small-Scale Distributed Solar Projects, 2019’ policy of the Government of Gujarat.


The Commission allowed the petition and approved the incorporation of ‘change of law’ in the proposed PPAs by GUVNL. After considering the appeals made by various stakeholders, the Commission had extended the period for execution of the PPAs to April 30, 2021, from March 31, 2021.

Later, the Commission received multiple pleas from the stakeholders, stating that given the Covid-19 situation, many solar project developers couldn’t execute the PPAs on or before April 30 as per the Commission’s revised order. They requested the Commission to extend the deadline for signing the PPAs by one to three months.

With the Commission receiving continued representations from the stakeholders and seeing no movement on the part of GUVNL and others, it decided to initiate suo-moto proceedings.

The representatives of the small-scale distributed solar projects developers submitted that the time for signing PPAs be further extended by three months in the light of the Covid-19 crisis prevailing in the state. They also requested the Commission to allow the power of attorney of the selected solar project developers to be authorized to sign the PPAs on behalf of the solar project developers.

GUVNL, in its submission, said that the distribution licensees had already started the execution work of the PPAs with the developers. The state DISCOM said that the distribution licensees had decided that the PPAs would be signed at different licensee areas. It said that the offices of the licensees were open and solar project developers had been given time slots to sign the PPAs provided there was no public gathering at the offices. On the issue of whether the DISCOM had any objection if the time was extended, the DISCOM said that it had no objection to the extension of the time.

The representative of the Paschim Gujarat Vij Company submitted that in its area, it had designated 12 offices to execute the PPAs. Moreover, it had also planned to carry out a camp at the Sabarmati circle office in Ahmedabad on April 23-April 24 to execute the PPAs with the solar project developers.

The Dakshin Gujarat Vij Company, in its submission, said that in its area, the PPAs were to be signed with 75 solar developers, but things had not materialized.

Commission’s Analysis

After considering all the facts, the Commission noted that a very small number of PPAs had been signed in the face of the Covid-19 situation in the state. The Commission observed that the situation had become grave than before, and there was a need to extend the time limit for signing the PPAs. The state regulator, however, rejected the request to allow power of attorney to sign the PPAs.

Further, the Commission stated that the DISCOMs had taken proper care of the work for signing the PPAs with the solar developers within the stipulated time up to April 30. However, with the current health emergency in the state, it was necessary to avoid public gatherings, it observed.

Taking cognizance of all the appeals, the Commission decided to push the window for signing PPAs by another month to May 31.

In October last year, GUVNL had invited applications for setting up small-scale solar projects ranging between 0.5 MW and 4 MW. The tender was open to individuals, companies, associations, and cooperative societies.

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