Wind Energy Developer Seeks Exit Over Penalty Fears; CERC Clarifies Its Stand

The Central Electricity Regulatory Commission (CERC), in its latest order, has denied relief to a wind power developer that sought to exit a project before its commissioning. Scatec India, the project developer, had approached the regulator fearing hefty penalties for potential delays and claimed that unfavourable conditions made it difficult to execute the project. The company requested either permission to withdraw from the project or other regulatory relief.

Background Of The Case 

The petitioner argued before CERC that the Ministry of Power’s order dated June 9, 2023 — which restricted extensions to the ISTS charges waiver — could adversely impact the project’s financial viability and, in turn, its tariff. Scatec India had won the project in a SECI tender in 2022 and was required to supply power to GRIDCO in Odisha through the ISTS network.

According to the developer, the MoP’s 2023 order fundamentally altered the bidding conditions. It said it had participated in the tender based on earlier 2021 guidelines, which allowed more flexible extensions in case of delays caused by government agencies, force majeure events or transmission providers. The company therefore sought a declaration that the revised ISTS waiver rules constituted a Change in Law (CIL) event, or alternatively, permission to exit the project without financial consequences.

The petition also cited delays in tariff adoption and uncertainty regarding the commissioning of the Koppal-II substation as additional concerns.

What CERC Said

CERC termed the application premature, stating that the developer did not meet the criteria for declaring the situation a Change in Law event at this stage.

“The Petitioner has not submitted the provisions under which the Commission could issue such a direction to GRIDCO. We are of the view that this particular prayer of the Petitioner is preposterous, as no such direction could be issued by the Commission, especially when we have concluded that the MoP’s order dated 9.6.2023 cannot be considered as a CIL event at this stage,” the Commission said in its order.