CERC Rejects Windpower Windfarm’s Grounds for Failure to Commission Project

CERC Approves Trading Margin of Rs.0.07/kWh in SECI's PSAs with Distribution Firms

A petition filed by Airpower Windfarms, contending that because the Gujarat Energy Development Authority (GEDA), refused to extend the developer permissions, it was unable to commission its project, has been turned down by the Central Regulatory Electricity Commission (CERC).

The firm said that it was granted Stage-I Connectivity on 13.7.2018 and Stage-II Connectivity on 24.8.2018 by the CTUIL for a 250 MW Wind Farm Project with connectivity at Jam Khambaliya PS, which is a part of the ISTS. The firm said that the connectivity agreement was executed between it and the CTUIL on 11.9.2018. Airpower Windfarms Pvt Ltd furnished a connectivity bank order guarantee of ₹5 crore in favour of the CTUIL, which is still valid. It contended that the firm took significant steps and acquired 100% land for the establishment of 250 MW Project including achieving financial closure for the Project on 20.7.2018, received developer permissions for the project from GEDA, NOC from Airports Authority of India for construction at the sites allotted to Airpower Windfarms.

Further, the firm has contended that Revenue Department of Gujarat Gujarat, issued resolution dated 27.11.2019, and decided that SECI- I, II, III & IV bid winners would be allotted Government land as identified by bid winners. However, for SECI-V and all windfarm projects that follow, the Government land will be allocated only in proposed Renewable Energy Park. Keeping this in mind, in the State of Gujarat, allotment of Government/revenue land has been restricted to SECI- I to IV bid winners only.

After it was granted Stage-II Connectivity, Windpower Windfarms applied to GEDA for developer permissions. The Agency granted approval on various dates at different sites for the project. Airpower Windfarms applied for extension of validity of all the developer permissions through letters for another year for approvals for establishment of the 250 MW project at different locations. This request was rejected by GEDA.

As noted by the CERC, Airpower Windfarms, which now seeks extension of time of five months for infusion of equity of at least 10% for setting up the project, the firm was required to acquire ownership on lease rights or land use rights for 50% of the land, achieve financial closure or submit proof of release of at least 10% funds towards commissioning of the Project to the CTUIL within 9 months from the date of grant of Stage-II Connectivity. However, the firm failed to do so.

The CERC further notes that the firm has failed to show what prevented it from making use of the developer permissions given to it by the GEDA for establishing the project before 27.11.2019.

Airpower Windfarms said that construction and completion of the transmission system i.e. Jam Khambaliya PS through which the firm is to evacuate power was postponed. It has further said that in
the absence of transmission system, the project would be stranded on account of non-availability of evacuation infrastructure. Countering this, the CERC has noted that there was absence of seriousness on the part of the Airpower Windfarms in project execution as laid out in the terms of the contract.

Another contention of the firm was rejected by CERC, which was that it “was restricted from participating in SECI Wind tenders since SECI invited location specific tenders where Jam Khambaliya was not covered.”

Thus, the CERC has delivered the decision that “refusal to extend the validity of the Developer
Permission by GEDA and change in the land policy of Government of Gujarat, have no merits in the facts and circumstances of the case.”