SECI’s 1110 MW Hybrid Projects Face a Long Delay Due To Uncertainty Over SC Judgement

In yet another case involving adoption of tariff after taking into account change in law events, a key SECI project, the 1110 MW (Tranche III) Wind -Solar Hybrid project could be facing a long delay. The letter of award to the winning bidders had been issued on 31/12/2020, ie, almost a year back.

The project, which involves ABC Renewables (380 MW), AMP Energy (130 MW) and Adani Renewable (600 MW), faces every change in law impact, and more, thanks to the Supreme Court judgement on laying underground transmission cables in the habitable area of the Great Indian Bustard.

Even as the Central Electricity Regulatory Commission (CERC) manfully continued to tackle the issues arising from the increase in duty on solar inverters, change in GST norms, and the impact of customs duty increases from April 2022, it declined to get involved with the Supreme Court judgement. “We observe that the claimed Change in Law event (i.e. decision dated 19.4.2021 of the Hon‟ble Supreme Court in the Writ Petition (Civil) No. 838 of 2019) is beyond the changes in the rates of Safeguard Duty, GST and Basic Custom Duty for which the Petitioner has categorically prayed to recognize Article 12.2 of the PPAs and Article 8.2 of the PSAs at the time of adoption of tariff by the Appropriate Commission”. Thus, this was one issue where affected parties are unlikely to find an amicable settlement amongst themselves.

Almost 20 GW of renewable energy projects are hanging while the issue of underground cabling versus overground is sorted out in Rajasthan by the Supreme court, with most developers clear that the underground cabling option is almost a non-starter due to issues linked to initial high costs, and perhaps, even long term maintainance costs in case of cable faults. Thus even as the Ministry of Power, Government of India has notified the Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021 to enable easier settlement of disputes linked to Change in law events, that is unlikely to help in this case.