Landmark Indian solar case a ‘waste of time’: SunBorne MD

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

A landmark case in the Indian state of Gujarat is wasting the solar sector’s resources and creating unnecessary uncertainty, according to the managing director of SunBorne Energy.

The company is one of five taken to the Gujarat Electricity Regulatory Commission (GERC) by Gujarat Urja Vikas Nigam Ltd. (GUVNL), a state-owned distributor that is looking to cut the rate it pays for electricity from 88 solar projects by 28%.

The petition claims the solar developers are enjoying “windfall profits”. An initial hearing took place on Tuesday (23 July) where lawyers representing the companies involved called for the petition to be thrown out.

James Abraham, managing director of SunBorne Energy, told PV-Tech that the companies were making “good not great profits” and warned the petition would have serious consequences if it gained traction.

“Overall this entire case is a precedent setting one,” Abraham said. “The most important issue is whether this calls into question any contracts. If the regulators honour the petition and they start examining contracts, the risk is that anyone can then refute a signed agreement and go to the regulator based on this precedent. That is why, as I listened to what they said yesterday, the regulator was being very, very careful even to admit the petition. This is by no means closed out yet.”

Abraham said the majority of the parties were confident that the petition would not proceed.

“If you look at most of the investors, everyone is confident about how this is going to turn out. It’s an incredible waste of time and money and it creates uncertainty.

Should things go against SunBorne and its peers, the result could be severe. Gujarat is home to more than half of India’s solar power capacity.

“If they admit the petition and do a tariff reduction across the board, that is the worst case situation. That would allow any contract to be opened and on the regulators orders, be challenged. That would create the worst situation for the industry. It would call into question the sanctity of contracts. How do you then make investments based on that?”

GUVNL claims that the rate it has agreed to pay developers over a 25-year period is too high but Abraham raised question marks about its calculations.

“In the petition that the distribution company made it cited ten examples where developers were making windfall profits. That’s ten out of 88 so the sample size is small and of those ten, three were represented at the hearing and said the data was wrong.

“I think the starting point, the basis on which they are making these assertions, is itself called into question. Certainly if you look at the data across the board, none of the developments were at the capital costs that GUVNL had suggested,” claimed Abraham.

The alternative to an across the board tariff cut would be a case-by-case examination by the regulator of each of the 88 projects.

“If they do look at this on a project by project basis I’m not worried because every project, certainly ours, will be able to show there is no such thing as windfall gains. Everybody is making good but not great profits and developing renewable power in the process.”

The second half of the hearing will take place on 5 August with GUVNL given the chance to respond to the calls for dismissal raised by the developers.

2 December 2021
Intersolar is the world’s leading exhibition & conference series for the solar industry. As part of this event series, Intersolar India in Mumbai is India’s most pioneering exhibition and conference for India’s solar industry. It takes place annually and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. Since 2019, Intersolar India is held under the umbrella of The smarter E India – India’s innovation hub for the new energy world.
9 December 2021
The Smart Energy Council is hosting Australia’s second Virtual Smart Energy Conference and Exhibition on Thursday, 9 December 2021. This event will show that the industry powers on despite COVID-19 and we are standing together undeterred in spirit. Bringing our global community together using the latest technology.
13 January 2022
Intersolar North America and Energy Storage North America “Come Together” for the first time in Long Beach, CA—connecting installers, developers, utilities, technology providers, policy makers, and key stakeholders from around the world to advance the clean energy future. With best-in-class conference programming, integrated exhibits and pavilions, and the live Solar Games installer competition, #isnaesna21 will showcase the industry trends, innovative solutions, and emerging talent transforming the solar, energy storage, and e-mobility markets. Register today to redeem our exclusive offer for PV Tech readers—free expo hall or 20% off full conference pass.
1 February 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.
7 March 2022
Take your chance to join the most powerful platform in the MENA region. Middle East Energy (MEE), Intersolar, and ees, the leading energy exhibitions are joining hands to co-deliver an outstanding renewables and energy storage event at Middle East Energy 2021. Renewables and energy storage at MEE is the largest gathering of solar and renewable energy industry professionals in the Middle East & Africa, offering the most effective trade focused platform to international manufacturers and distributors looking to meet regional buyers.

Read Next

December 1, 2021
Major US bank Wells Fargo has closed its maiden tax equity investment into a colocated solar-storage project currently under construction in New Mexico, US.
PV Tech Premium
December 1, 2021
The price of shipping containers from Asia to Europe and North America remains high but should start to come down in the new year, although the main price drops won’t occur in earnest until 2023 when new capacity is brought online. That additional capacity, however, may be offset by new International Maritime Organisation (IMO) rules to address the industry’s emissions
December 1, 2021
Enefit Green, the renewables subsidiary of Estonian state-owned utility Eesti Energia, is looking to procure up to 500MW of solar modules in the next three years.
December 1, 2021
Tech major Amazon has added a further 2GW to its committed utility-scale solar PV capacity, adding projects in the US and Europe to its renewables portfolio.
December 1, 2021
Global solar PV deployment is on track to grow by 17% this year in spite of surging commodity prices increasing manufacturing costs, according to the International Energy Agency (IEA).
December 1, 2021
The European Commission (EC) has approved the extension of Poland’s auction scheme for renewable resources that is predicted to support the creation of 9GW of renewables after it passed EU state aid rules

Subscribe to Newsletter

Upcoming Events

Solar Media Events
February 1, 2022
London, UK
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal