Taj Mahal

The National Solar Energy Federation of India (NSEFI) has sought an extension of project commissioning timeline for six solar projects in Uttar Pradesh.

The NSEFI wrote a letter to the Uttar Pradesh government seeking the extension to commission select solar power projects claiming that state agencies have been lax and are to blame for delays. The NSEFI letter stated, “The projects of our members should be made eligible for extension of time as there was a default on the part of Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA), UPTCCL and UPERC.”

In July, the Uttar Pradesh Power Corporation (UPPCL) cancelled power purchase agreements for six solar projects because they did not commission on time. Their original commissioning date was January 2017. The six companies with cancelled PPAs were: Adani Green Energy, Sahastradhara Energy, Pinnacle Air, Awadh Rubber Prop Madras Elastomers, Technical Associates and Sudhakara Infratech.

The NSEFI has discouraged the cancellation of PPAs in Uttar Pradesh, as it could negatively affect investments and activity in the solar sector in the state.

An official from UPPCL told Mercom, “Everything cannot be as developers want all the time. They [developers] asked for an extension in the project commissioning deadline; the deadline was extended to March 2017.”

According to Mercom’s India Solar Project Tracker, the Uttar Pradesh government had entered into agreements with 16 projects in 2015 to develop 215 MW of solar projects. Out of these 16 projects, nine projects have been commissioned for 135 MW and six projects with a combined capacity of 80 MW are yet to be commissioned.

The UPPCL official also commented, “The six companies for whom the PPAs have been cancelled are the companies that readily agreed to reduce solar tariff to Rs.7.02 (~$0.11)/kWh as suggested by UPPCL. Since they agreed to the new tariff, they are at fault for the delays.”

Mercom previously reported that Agarwal Solar Power (UP) Private Limited, an Agrawal Group subsidiary, commissioned a 5 MW grid-connected solar project in Mahoba, Uttar Pradesh at renegotiated tariff of Rs.7.02 (~$0.11)/kWh.

The MNRE recently issued a letter directing state agencies to extend project completion time periods for delays of any kind on the part of the state government. “That is a silver lining for us,” stated an executive at a solar project developing firm.

UPNEDA recently issued the ‘Draft Solar Power Policy-2017’ for Uttar Pradesh targeting 10,700 MW of solar by financial year 2022. Currently, there is a lull in tender and auction activity across India due to the anti-dumping investigation and GST uncertainty. If these PPAs are cancelled, it would adversely affect investment plans of developers in the Uttar Pradesh solar sector, leading to a setback in the state’s solar installation target achievement.