CERC Declines To Give Relief To Adani Subsidiary SBSR Power Over Delay In Solar Project 

Solar Power Fence. Pic Courtesy: Next2Sun GMBH

The Central Electricity Regulatory Commission (CERC), in its latest order, has refrained from granting any relief to solar power producer SBSR Power Cleantech Eleven for the delay in the commissioning of its proposed solar power project. SBSR is a subsidiary of Adani Green Energy Limited (AGEL). 

The firm received a contract from the Solar Energy Corporation of India (SECI) in 2019 for a 300 megawatt (MW) solar project in the Bikaner district of Rajasthan. It was done through a competitive bidding process. The agreement mandated SBSR to supply the electricity to discoms through SECI. 

The signed Power Procurement Agreement (PPA) mandated the power producer to start its commercial operations on January 3, 2021. Later authorities also granted an extension of the scheduled commissioning date (SCoD) to November 20, 2021. However, SECI declined to give further extensions for the delay citing the terms of the contract. 

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The CERC noted that the maximum period allowed for the commissioning of the plant in full capacity with encashment of Performance Bank Guarantee is up to six months from the extended SCoD, which was May 20, 2022 (6 months after the SCoD). However, till that date, SBSR had commissioned only 150 MW out of the total sanctioned capacity of 300 MW. 

In a meeting among SBSR, SECI, and the discoms, namely TDDL and BYPL, the discoms showed interest in off taking the power from 62.5 MW capacity based on the existing PPA and PSA conditions without any financial liability. However, the power producer said it wanted additional financial aid due to a change in law event due to the imposition of increased GST and Basic Customs Duty (BCD) on imported solar panels and solar cells. SBSR, the petitioner in the case claimed that the delays were not under the control of the agency. However, the Commission rejected the pleas of the solar developer. 

Final order

“The Commission will have to go by the provisions of the PPA, which stipulate inter alia that ‘in case the Commissioning of the Project is delayed beyond 24 months from the Effective Date, it shall be considered as an SPD Event of Default and provisions of Article 13 shall apply, and the Contracted Capacity shall stand reduced/amended to the Project Capacity Commissioned within 24 months of the Effective Date, and the PPA for the balance Capacity will stand terminated and shall be reduced from the project capacity”. Accordingly, we hold that the contracted capacity of 300MW stands reduced to the project capacity commissioned (150MW) before 20.05.2022 in terms of Article 4.6.2 of the PPA,” the order said. 

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It also added, “In view of the intimation by SECI that the Petitioner’ may self-commission the 62.5 MW capacity and decide on the sale of power in view of the non-extension of time sought for’ and consequently, the petitioner having entered into a separate contract for the said discharged 62.5 MW capacity, we hold that the petitioner is not obligated to supply the commissioned capacity of 62.5 MW to TPDDL on a pro-rata basis in terms of the PPA dated 20.08.2019.”