CERC Declines To Give Relief To ReNew Wind Energy In Gujarat ISTS Project Case

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In its latest order, the Central Electricity Regulatory Commission (CERC) declined to give any relief to the ReNew Wind Energy (TN) Private Limited in a case related to its proposed 265 MW of wind project in the Bhuj district of Gujarat. 

The wind energy developer had signed a Power Purchase Agreement (PPA) with the Solar Energy Corporation of India (SECI) for this project for wind power. It also signed agreements with the Power Grid Corporation of India (PGCIL) for transmission services. However, the project was marred with delays due to a sudden change of land allocation laws of the Gujarat government, followed by the COVID 19 pandemic. 

ReNew, in its petition before the CERC, had asked the Commission to consider declaring that the firm was entitled to terminate the PPA because of force majeure and impossibility. It also sought relief from the CERC to restrain the SECI and other concerned institutions from taking any adverse or coercive action against the firm because of the reasons that led to such a situation. 

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ReNew, in its petition before the central authority, said that on June 1, 2018, SECI gave ReNew the Letter of Award for setting up the wind power project of 265MW in Bhuj district with a tariff of Rs 2.52 per KwH. 

However, on July 25, 2018, the Gujarat government wrote to all Collectors in the State of Gujarat stating that out of the applications received for land allotment for wind power projects, sanctions must be granted only for those bids which GUVNL has approved. The remaining should be kept pending till a policy decision is taken.

Moreover, on February 19, 2020, an order from the Ministry of Finance stated that disruption in the supply chain due to the spread of Covid-19 in China or any other country will be covered as a case of natural calamity and Force Majeure clause could be invoked in such cases. 

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However, in its order, the Commission declined to give relief to ReNew, claiming that it did not choose other alternate ways. “We observe that the PPA was signed by the Petitioner with clear understanding of the implications of various provisions including those of force majeure. In some cases, options (for instance, leasing of Government land and alternatively leasing of private land) were available with the Petitioner to mitigate the alleged hardships, but it chose not to exhaust those options. In some others, reliefs were already extended by the Respondent (SECI). As such, the Commission finds no case to invoke Regulatory powers provided under Section 79 of the Act,” the CERC order said.

The order also said that ReNew failed to prove the occurrence of any Force Majeure event. “In view of the findings of the Commission…no relief is made out in favour of ReNew TN. Accordingly, Petitioner shall be liable to pay relinquishment charges in accordance with CERC Connectivity Regulations, 2009…” the CERC order said.