In a major set back for solar power developers in Gujarat, the state power regulator, Gujarat Electricity Regulatory Commission (GERC) on Friday dismissed all petitions filed for extension of the control period. The regulator, in its order announced on Friday, rejected the petitions stating that the same were not made on strong grounds.
"None of the petitioners 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. In view of the above analysis, 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," GERC stated in its 53-page order.
About 36 different solar power developers including Hiraco Renewable Energy, Kemrock Industries and Exports Ltd, Tata Power Renewable Energy, Moser Bear Energy and Development Ltd, Lanco Infratech Ltd and trade body Solar Energy Association of Gujarat among others had filed petitions for extension of the 'Control Period' as defined in the Commission's order no. 2 of 2010 dated January 29, 2010.
The petitioners had put forward several reasons for seeking extension of the control period. Some raised land related issues, flooding of land due to unusual and excessive rainfall in the areas where most of the solar projects are proposed to be located. Change in design of sub-station and connected equipment directed by GETCO. Some also raised the issue of non-availability of evacuation facility by the state transmission utility, Gujarat Energy Transmission Corporation (GETCO).
"Though, the petitioners 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," GERC further stated.
According to GERC, 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. Hence, all the petitions are dismissed," the GERC order said.
Earlier, the solar power developers were given a deadline of December 31, 2011 to commission the solar power projects in the state.
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However, the deadline was later extended till January 28, 2012, but the developers further demanded an extension of deadline by about six months.
In all, 84 power purchase agreements (PPAs) were signed for 968.5 megawatt (Mw) during November 2010 to January 2011 under two phases.
On behalf of Government of Gujarat, principal secretary, energy & petrochemicals department had submitted an affidavit on January 6, 2012 along with a letter stating that projects of about 587.4 Mw out of 968.5 Mw for which PPAs had been signed, would be commissioned during the control period in question.
The regulator also pulled up the state Energy and Petrochemicals Department of the state government for providing insufficient information regarding power projects expected to be commissioned during the control period. "In an additional affidavit dated 16 January 2012 by the Government of Gujarat it was indicated that in addition to the 29 projects for 303.4 Mw already commissioned or ready for commissioning, the power projects which are likely to be commissioned by 28 January 2012 will have a capacity of 266.20 Mw instead of 284 Mw. Thus, there has been lack of clarity, accuracy and consistency on the part of the respondents, particularly the Energy and Petrochemicals Department," the order stated.
In order to encourage solar power projects in the state, the state government had launched a solar policy in 2009, under which a 25-year power purchase agreement is to be signed with the company enabling them to avail tariff for photovoltaic projects at ' 15 per unit or kilowatt hour for the first 12 years and '5 per unit from the 13th to the 25th year.
For the solar thermal projects the tariff is fixed at ' 11 per unit for the first 12 years and '5 per unit from the 13th to the 25th year.
As per the terms of PPAs, if a developer fails to commission the project by the set deadline, it is liable to pay a penalty of '10,000 per day per Mw to Gujarat Urja Vikas Nigam Ltd (GUVNL), the state-owned power distribution utility, with which the PPAs have been signed.