The Central Electricity Regulatory Commission (CERC) recently ruled that a solar developer was not obligated to supply the commissioned capacity of 62.5 MW after the extended scheduled commissioning date to the Tata Power Delhi Distribution (TPDDL) in terms of the power purchase agreement (PPA). It was free to decide on the sale of power to third-parties or in the open market.

TPDDL has submitted that it was willing to offtake the 62.5 MW capacity commissioned by the developer after the extended commissioning date as per the terms of the PPA dated August 20, 2019, and the power sale agreement (PSA) dated June 26, 2019, it executed with the Solar Energy Corporation of India (SECI).

SBSR Power Cleantech Eleven had filed a petition seeking an extension of the scheduled commercial operation date of the project.

Later TPDDL had filed an interim application seeking the Commission to direct the solar power developer to supply 62.5 MW of the commissioned capacity after the extended commissioning date to TPDDL on a pro-rata basis.

Background

SBSR Power Cleantech Eleven is setting up a 300 MW solar power project in the Bikaner district of Rajasthan.

SECI floated a tender to procure 1,200 MW of power generated from ISTS-connected solar power projects on January 10, 2019.

SBSR Power was selected as one of the successful bidders to develop a 300 MW solar power project and for the supply of power by SECI as an intermediary agency to the buying utilities under a PSA to be entered into between SECI and such buying utilities.

As per the PPA, the scheduled commissioning date of the project was January 3, 2021, which was later extended to November 20, 2021.

Later the solar developer filed a petition seeking an extension of the scheduled commercial operation date until July 2, 2022. SECI informed the Commission that the request for an extension of the date had not been considered by it.

Subsequently, in a meeting among SECI, TPDDL, BYPL, and the solar developer, it was recorded that the maximum period allowed for the commissioning of the total capacity was up to six months from the extended commissioning date, i.e., May 20, 2022 (6 months from November 20, 2021), which had lapsed. As of May 20, 2022, the petitioner had commissioned only 150 MW out of 300 MW capacity, whereas the solar developer was ready to commission 62.5MW on June 20, 2022.

TPDDL argued that the solar power developer had failed to discharge its contractual commitments as it could not commission the total project capacity, thereby denying the allocated contracted capacity, i.e., 200 MW tied up with TPDDL.

It added that on account of the SECI’s letter dated June 30, 2022, the solar developer was denied further extension as it failed to make out a case of ‘force majeure,’ which prevented the solar developer from commissioning the entire project capacity.

Further, TPDDL added that inordinate delay in the commissioning of the total project capacity had not only deprived TPDDL of availing renewable energy, which is to be ultimately supplied to the end consumers of Delhi but had also prevented TPDDL from fulfilling its renewable purchase obligation targets (RPO).

SECI said that the maximum period for the commissioning of the project lapsed on May 20, 2022. The solar developer had commissioned only 150 MW by May 20, 2022. The nodal agency added that as per the PPA, the contracted capacity will stand reduced to the capacity commissioned until the maximum time allowed for the commissioning of the project. Given these circumstances, SECI was not in a position to extend the scheduled commissioning date.

Commission’s analysis

The Commission observed that TPDDL was willing to offtake the 62.5 MW capacity commissioned by the solar developer.

The central regulator noted that the contracted capacity of 300 MW stood reduced to the project capacity commissioned (150 MW) before May 20, 2022.

Further, given the intimation by SECI that the solar developer may self-commission the 62.5 MW capacity and decide on the sale of power, the Commission held that the solar developer was not obligated to supply the commissioned capacity of 62.5 MW after the extended commissioning date to TPDDL on a pro-rata basis in terms of the PPA.

Earlier in 2021, CERC had rejected the request of a solar developer for an extension of the scheduled commissioning dates of two solar projects of 70 MW each at the Bhadla Solar Park in Rajasthan.

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