Solar Developer Gets Relief At APTEL On SCOD Extension

Solaire Urja Private Limited, a Pune based solar developer appears to have got some much needed relief at APTEL, after the Appellate Tribunal chose to go with the developer’s contention on a case that was gone the other way at CERC.

Case Overview:

Solaire Surya Urja had gone to APTEL to challenge the order by CERC dismissing their petition related to the Scheduled Commercial Operation Date (SCOD) for their solar projects in Rajasthan. After entering into PPAs with NTPC on May 2, 2016, Solaire was to commission the projects by June 1, 2017, as per the terms of the PPA.

Rajasthan Renewable Energy Corporation Limited (RRECL) told the firm on 2nd December, 2016 that 4 Nos. of 220 KV bays for power evacuation at 400 KV, RVPNL, Grid Sub-Station (Bhadla) were allotted in its favour. However, On 19th April, 2017, RRVPNL informed the Appellant that evacuation infrastructure was not available at Bhadla sub-station and would likely to be available by 15th June, 2017. Accordingly, the Appellant informed NTPC on 22nd May, 2017 regarding non availability of necessary and adequate evacuation system. NTPC washed its hands off the matter, asking the firm to pursue the state agency. After much to and fro, on 4th August, 2017, RRVPNL informed the Appellant that transmission system would be made available only by 31st August, 2017.

NTPC, however, stuck to the terms of the PPA, and made a demand for liquidated damages on August 8.

For the two projects of 70 MW each, they had sought an extension of the SCOD for two solar project s due to non-availability of adequate evacuation transmission systems, which was the responsibility of RRVPNL (Rajasthan Rajya Vidyut Prasaran Nigam Limited).

However, CERC dismissed the petition and allowed NTPC to recover liquidated damages from the Appellant for the delay in supplying power. In doing so, CERC clearly disagreed with the contention of Solaire Urja that the delay was due to reasons beyond their control, specifically the delay in the availability of the evacuation system by RRVPNL. While CERC acknowledged the connectivity constraints but concluded that the projects could have been commissioned without the availability of connectivity. That left Solaire Urja liable for liquidated damages and no extension of SCOD.

APTEL Order

In deciding the merits of Solaire’s petition, APTEL went by the submission that they had achieved readiness much prior to the SCOD i.e 1st
June, 2017, which is evidenced through the letters written to the CEIG requesting its visit for inspection of the project and the CIEG certificate which demonstrates that the capacity to the extent of 59 MW (Project 1) and 40 MW (Project 2) achieved readiness prior to 1st June, 2017.  Also, the conditions of the Solar Park where the projects were sited also indicated that commissioning was to be done in conjunction with transmission permissions and capacity. This went against both the transmission firm and NTPC’s contention that the project could have been commissioned without transmission infra.    APTEL also noted  the undertakings dated 31st May, 2017 and 11th June, 2017 extracted from the Appellant by RRVPNL to the effect that even after receiving connectivity, Appellant shall not inject power in the grid without prior approval of RRVPNL authorities and in the event of any damage to RRVPNL on account of unauthorized injection of power to the grid, Appellant shall be held responsible to compensate for such loss.

Thus the APTEL bench on the other hand found merit in Solaire Urja’s arguments, and RRVPNL liable for the delay. It decided to extend the SCOD till 11th August 2017 and ruled that the Appellant is not liable to pay liquidated damages. NTPC has also been directed to refund any liquidated damages collected from the Appellant within one month.