The federation has requested that the deadline for the setting up of 2 GW of the interstate transmission system (ISTS)-connected solar power projects (Tranche IX) should be extended to July 15, 2020. It has also requested SECI to look into other concerns of the stakeholders regarding this tender.
NSEFI, in its letter, mentioned that due to COVID-19 induced lockdown and restrictions in different parts of the country, many of its members have been unable to stick to the timeline of June 22, 2020, for the tender.
Regarding the connectivity and long-term open access, the letter noted that a lot of incremental activity is likely to be undertaken at various substations in the coming month. Considering this, the federation asked if that incremental capacity could be considered for the bidding as it has not yet been approved but is likely to be.
“If such a capacity is considered by the bidder, would the bidder be allowed to apply for such connectivity and long-term access irrespective of the approved date of bidding and the date of scheduled commissioning?” the letter further asked. The federation asked that if such additional facility becomes available beyond December 31, 2022, would the ISTS waiver still be available to the successful bidders.
In November 2019, the Ministry of Power announced the extension of the waiver on ISTS charges and losses on the transmission of electricity generated from solar and wind energy projects. It said these charges would be waived as long as they are commissioned before December 31, 2022. This deadline was revised from March 31, 2022, previously.
Notably, recently NSEFI also asked the Ministry of New and Renewable Energy (MNRE) to extend the waiver of ISTS charges and losses for renewable energy projects.It suggested that the deadline should be extended immediately by a year in light of the ongoing COVID-19 pandemic.
Highlighting the importance of power purchase agreements (PPAs), the letter added that most lenders are reluctant to perform due diligence and accord approval for the project without the necessary tariff adoption and power sale agreement (PSA).
The federation requested SECI to consider the tariff adoption date as the zero date as only after such regulatory clearance, can the funds be committed for the project and project activities to be initiated. So, the federation noted that the PPAs should be signed only after the adoption of the tariff and obligations under the PPA should be linked to the effective date.
The federation also requested SECI to allow submission charges and performance bank guarantees (PBG) only after the adoption of tariff and PSA by the respective electricity regulatory commission. As per the current provision, the successful bidders are required to submit the success charges within 30 days from the Letter of Award (LoA) and PBG within 70 days of the LoA or before the signing of the PPA, whichever is earlier.
For this, the solar body reasoned that PPA signing could also get delayed due to a delay in the signing of the PSA. In all such cases, the additional time for which the PBG is required to be kept valid unnecessarily adds to the cost of the project. Any additional cost adds to the overall cost of the project and also reflects in the bid price submitted by the bidders.
Further, it said that LTA applications result in additional liabilities of transmission charges and huge relinquishment charges in case the access is to be surrendered due to any unforeseen circumstances.
The NSEFI requested SECI to allow the application of LTA to be made after the adoption of tariffs with the provision for the extension of LTA dates matching the scheduled or extended commercial operation date (SCOD). The current draft of the PPA has provisions for the extension of SCOD in case of any delay in the adoption of the tariff but the LTA date once granted does not change even if there is an extension in the SCOD.
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.