CERC Declines Relief To Adani Subsidiary Over Delay In Bhuj Wind Project

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The Central Electricity Regulatory Commission (CERC) in its latest judgment declined to give any relief to Adani Wind Energy Kutchh One Limited over its delay in the commissioning of its proposed 250 MW wind energy project. The project was slated to come up at Dayapar village in the Bhuj district of Gujarat. 

The Adani Group subsidiary had won the tender for the project from the Solar Energy Corporation of India (SECI). SECI had floated the tender for this project on January 12, 2018. The company received the Letter of Award (LOA) for the sale of power with its quoted tariff of Rs 2.45 per unit. The Scheduled Commissioning Data (SCoD) for the project stood at November 24, 2019. PGCIL was the transmission entity in the case and also one of the respondents. 

As per the norms, the Adani subsidiary had also submitted its Performance Bank Guarantee (PBG) of Rs 50 crore (at the rate of Rs 20 lakh per MW) to SECI. However, the company blamed the lack of connectivity and related issues for the delay in the commission of the project. Later, the company also surrendered the project citing such issues. 

Adani Wind Energy Kutchh One Limited, in its petition before the CERC appealed to the central electricity regulator to declare the cited issues as “force majeure” (where the company had no control) and to direct SECI to return the bank guarantee of Rs 50 crore besides a relief from any other coercive measures. 

The company claimed that several situations like the delay in the availability of transmission infrastructure for power evacuation, the impact of COVID-19, damage of transmission power towers by local villagers, the impact of cyclone Vayu, heavy rains and delay in the adoption of the tariff should be counted as ‘force majeure’ events.  

The CERC in its judgment declined to buy the arguments of the petition and declined to give the firm relief. It pointed out that the petitioner–Adani Wind Energy Kutchh One Limited did not used the alternative power transmission option and also continued its negotiations for delayed SCoD beyond the permissible time limit. 

In its written judgment, CERC said, “In view of the above, we are of the view that the sudden relinquishment of LTA and the invocation of a long stop date by the Petitioner appears to be an afterthought. Therefore, the termination of PPAs cannot be attributed to the delay in the operationalization of LTA, as PGCIL had made alternate arrangements for the evacuation of power. Accordingly, we hold that the alleged event, the non-availability of the transmission infrastructure required for the evacuation of power from the projects, is not covered as a force majeure event in terms of Article 11.3.1 of the PPAs.”