4-Year Project Delay Proves Expensive For Rajasthan Solar Developer

The Appellate Tribunal For Electricity (APTEL) bench has gone with the views of the Rajasthan Electricity Regulatory Commission (RERC) in a case (appeal no 172 of 2019) involving a solar power developer, Arjun Green Power Pvt Limited against the order of the former.

• Case Overview: Arjun Green Power Pvt. Ltd., a solar power developer, appealed against the Rajasthan Electricity Regulatory Commission’s order regarding delays in commissioning their solar project. The project, originally scheduled to be commissioned by March 2024 at a PPA tariff of Rs 6.45/kWh.
• Project Delays: The project faced multiple extensions due to allegedly Force Majeure events, but the final extension was until February 22, 2018, before final commissioning by May 2018. The appellant argued that delays were due to the respondents’ inaction. The Aptel bench disagreed with the contention based on a study of progress made and all the documents submitted
• Commission’s Decision: The Commission held that the delays were attributable to the appellant and refused further extensions. The applicable tariff was reduced due to the delay. The new tariff, as decreed by the RERC for the commissioning in Feb 2028, was considered at the prevailing generic tariff of Rs 3.93/kWh at the time of commissioning.
• Outcome: The appeal was dismissed, and the appellant was held liable for liquidated damages and the lower tariff applicable at the time of actual commissioning.

While ordinarily, such a sharp downward revision in tariff would be a body blow for a developer, in this case, it does appear that the developer did not order critical components especially the modules at a time so as to miss the subsequent drop in prices that also powered the tariff drops. Thus, without getting into the merits of a detailed explanation of the missteps by the developer that led the RERC and later, APTEL to conclude that the delay was the fault of the developer, it does appear that the developer will live to supply the 5 MW as promised, and hopefully learn his lesson.