CERC Sees Merit In SECI Plea Against Adani Green For 50 MW Wind Project Delay

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

The Petition 

Adani Green has petitioned Solar Energy Corporation of India Limited (SECI) seeking extension of Scheduled Date of Commissioning (SCoD) of a project from January 3, 2020 to March 5, 2020 without the levy of liquidated damages by the respondent.

The second respondent to the petition is  Punjab State Power Corporation Limited (PSPCL), the distribution licensee in Punjab.

In the petition, Adani Green has held that it had commissioned the project on January 3, 2020 itself and it be granted consequential reliefs as per the PPA.

Alternatively, it seeks that the Scheduled Date of Commissioning of the project be extended to March 5, 2020 without the levy of the liquidated damages by the respondent.

Additionally, it has asked pleaded that the respondent refund the liquidated damages of Rs. 3,44,44,444.

Backdrop

On December 29, 2017, the petitioner and SECI entered into a PPA for the establishment of 50 MW
wind project.

The petitioned maintains that as per the PPA, the SCoD of the project was May 3, 2019, subsequently extended by SECI to January 3, 2020.

On the extended date, the petitioner had fulfilled all parameters for commissioning without any delays. Under the PPA, physical verification was not required ito establish that the project commissioned, yet SECI insisted on physical verification of all the Wind Turbine Generators (WTGs).

The physical verification, however, could not happen.

The petitioner maintains that SECI is citing that the site visit could not take place and is refusing to acknowledge that the petitioner had met all the parameters for commissioning on January 3. As per SECI, the project was commissioned on March 5 and therefore, levied liquidated damages for the period between the two said dates.

Response From SECI

SECI in its reply dated August 6, 2021, has submitted as under:

Delay in Commissioning from 03.01.2020 to 05.03.2020

a) SECI had communicated the amended commissioning procedure to WPDs on April 16, 2020 and the same is applicable with effect from date of notification.

b) On receipt of the notice prior to synchronization dated November 7, 2019 from the petitioner citing that it intended to commission the project around November 27. SECI vide email dated November 18, 2019 sought certain documents from the petitioner before visiting the project site.

c) SECI vide email dated December 2, 2019 informed the petitioner that SECI officials may
witness commissioning of the petitioner’s project.

d) The petitioner vide email dated December 3, 2019 requested SECI to postpone their visit to
December 9 due to unforeseen circumstances.

e) Since, the permission for 06 WTGs was issued by GEDA on December 6, the petitioner had called the commissioning committee without obtaining necessary land clearance from State Nodal Authority (SNA), GEDA.

f) SECI vide email dated December 7, 2019 informed the petitioner that SECI’s officials will witness the commissioning of the petitioner’s project on December 9 to December 10.

A Primary Bone of Contention: Site Visits 

First Site Visit: Visit to 18 sites, other site visits put off

SECI vide email dated December 12, 2019 stated that the Petitioner has shown only 18 sites of WTGs in three daysand the petitioner informed SECI that on account of some RoW issues, it will not be possible to visit other sites. SECI requested the petitioner to resolve the RoW issues immediately to enable inspection of other sites. The petitioner vide email dated stated that ‘Due to persistence of RoW issues, we are not able to show further turbine locations (inspite of police help).’

Second Site Visit: Project not declared as commissioned

The commissioning committee visited the project site on January 3, 2020 and January 4. The petitioner showed only 19 WTGS out of the proposed 26 WTGs, the Commissioning Committee did not declare the project as commissioned.

The allegation of the petitioner is that it achieved commissioning of the project on January 3 is wrong.

Third Site Visit: SECI issues commissioning certificate

On February 19, the commissioning committee visited the project site and witnessed that 10 of proposed WTGs were not integrated with the SCADA system. Out of these 10 WTGs, WTG with ID DYA 101 was erected in October, 2019.

On March 5, the telemetry integration was completed and the petitioner fulfilled the criteria for being declared.
k) On March 6, SECI issued the commissioning cum COD certificate.

Request for extension of time

The petitioner in their letters dated 06.03.2020 and dated 13.04.2020 sought for extension of SCoD upto 05.03.2020 without levying liquidated damages. On 16.03.2020, SECI sought certain documents from the petitioner for processing the request for extension of time. SECI vide letter dated 24.04.2020 had dealt with the claims raised by the petitioner in their letters dated 06.03.2020 and dated 13.04.2020.

Force Majeure

To sum up, the force majeure is as follows:

* The delay in the physical verification of the project occurred due to certain force majeure events which were beyond the reasonable control of the petitioner.

* As under Articles 11.7.1 (b) and 4.5.1 of the PPA, in case the petitioner is prevented from performing its obligations in relation to the Scheduled Commissioning Date due any Force Majeure event affecting it, the Scheduled Commissioning Date shall be deferred till the said Force Majeure event lasts.

* The physical verification of the project could not occur because the employees of the Petitioner and the officials of SECI could not reach the project site on account of the RoW issues and the agitation by the local villagers, which were beyond the control of the Petitioner. The petitioner, to the best of its abilities tried to show the WTGs to SECI, however it could not show the same due to the events which were beyond its control. Therefore, the petitioner is entitled to an extension of the SCoD from January 3, 2020 to March 5.

* The petitioner should be granted time extension for the delay in filing of the petition for adoption of tariff by the respondent: the respondent had delayed in filing tariff adoption Petition before this commission.

Commission’s Stance: Petitioner’s petition stands rejected

The commission has refuted the claims and the pleas of the petitioner on the following grounds:

Project declared as non-commissioned: The Commissioning Committee could verify only 19 WTGs out of 26 proposed WTGs and thus could not declare the project as commissioned. It is further observed that the Petitioner had itself given advance notice prior to synchronization of 50 MW Wind Power Project on 08.02.2020 and informed that it intends to commission the Project around 13.02.2020.

SCoD Extension: The Commission is of the view that no extension of SCoD under Article 4.5 of the PPA is admissible on the ground as shared by the petitioner.

Adoption of Tariff: The Commission further notes that the petitioner has submitted that SECI has delayed in obtaining order from the commission for adoption of tariff and that in absence of the tariff adoption order, no lender was willing to come forward to lend money to the Petitioner for the commencement of the Project. The commission passed the order on 03.12.2019 in petition filed by SECI, adopting the tariff of the projects of WPDs including the petitioner under Wind Tranche-II Scheme. 

Conclusion 

The Commission is of the view that Article 3.1 of the PPA specifically stipulates that the petitioner has to fulfil the financial closure at its own risk and cost. Further, the said provision does not provide for any condition to be performed by SECI viz. adoption of tariff to enable the petitioner to fulfil the financial closure. Also, it is pertinent to mention here that insufficiency of finances or funds is specifically excluded from the ambit of a Force Majeure event under Article 11.3 of the PPA. As such, the Commission is of the view that no extension under Article 4.5 of the PPA is admissible on this ground also.