Gujarat Electricity Commission rules against time extension for solar project completions

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According to The Hindu Business Line, the Gujarat Electricity Regulatory Commission has decided against extending the January 29 extension, which solar developers were petitioning for in order to avoid coming under a lower tariff regime. Developers such as Tata, GMR, Lanco, Moser Baer and Surana Telecom had all come forward as petitioners for an extension of the project completion deadline. 

Petitioners asked for extensions citing various reasons including flooding, land acquisition issues, changes in the Gujarat Energy Transmission’s sub-station design, unavailability of evacuation facilities and insufficient time for completion of the project. The Hindu  noted that each project developer had signed a PPA with the Gujarat Urja Vikas Nigam state utility, which had agreed upon tariffs of Rs15 per unit for the first 12 years and Rs5 per unit between the 13th and 25th year.

“We decide that the petitioners have not succeeded in making out a case for invoking the inherent power of the Commission to extend the control period determined by the Commission in its Order No. 2 of 2010 dated 29 January 2010,” the Commission said in its order dated January 27.

Overall, 84 PPA’s were signed in two phases for a total of 968.5MW with a specified completion date of December 31, 2011. The Gujarat government did give developers more time, extending the deadline until January 29 with the clause that developers who did not complete their projects by the January deadline would get a lower tariff rate.

The Commission advised that it had taken note that many of the projects had already been completed or would be completed by January 29. According to the State Government, 54 developers would complete their projects, holding a 587.4MW capacity, out of a total PPA-signed projects of 968.5MW. Additionally, the Commission took into consideration the government’s notice that the prices of solar modules had fallen significantly, which it advised would allowed developers to not suffer a loss if the tariff was revised downwards.

“Though they have put forward a number of reasons for the relief they have sought, none of the petitioners, including the Association of Solar Power Developers, which has filed a separate petition, has indicated any ground whatsoever which is of universal application either in the State of Gujarat or a major part thereof by which all the projects are affected by such factors. Several projects have been or are likely to be commissioned during the control period itself. The reasons indicated by the petitioners appear to be in the manner of indirectly invoking the Force Majeure clause specified in the PPA, which cannot be addressed by a general order,” the Commission said.

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