Acme Solar is withdrawing its petitions to terminate the power purchase agreement (PPA) and transmission arrangements for the 600 MW solar project in Rajasthan. The clean energy developer had secured the project in 2018 at an INR 2.44/kWh (US$ 0.033/kWh) tariff in a reverse auction conducted by Solar Energy Corporation of India (SECI).
Last year, in a petition with regulator Central Electricity Regulatory Commission (CERC), Acme had submitted its decision to terminate the PPA contract with the SECI as it feared Covid-19-affected commissioning of the project would stretch beyond the six-month extension from the scheduled date enshrined in the agreement. It also cited delays in securing land for a necessary substation and the commissioning of associated transmission network infrastructure.
The fresh move to withdraw from project cancellation follows the announcement of Norway’s Scatec acquiring a 50% stake in Acme’s 900 MW solar assets in Rajasthan. However, it’s not clear how much of the capacity won at INR 2.44 falls under this arrangement.
Furthermore, a series of auctions in India have recently seen the discovery of much lower tariffs. Last year, in Rajasthan itself, a 1.07 GW auction attracted a tariff of INR 2/kWh (US$0.027). The tariffs touched an all-time low of INR 1.99/kWh (US$ 0.027/kWh) in a 500 MW Gujarat auction. More recently, Gujarat’s 500 MW solar auction saw an aggressive tariff of INR 2.20/kWh (US$ 0.030/kWh) despite the basic customs duty impact.
Acme has formed special-purpose vehicles ACME Phalodi, ACME Raisar, ACME Deoghar, and ACME Dhaulpur to develop and commission 2×300 MW solar power projects located in Tehsil Pokhran, Rajasthan.
SECI has already extended the scheduled commissioning date (SCOD) of the projects by 481 days on account of force majeure events; the revised commissioning dates for the two projects now fall in February and March 2022, respectively, as against October and November 2020 set earlier.
Power Grid Corporation of India Limited (PGCIL) has, however, refused to extend long-term access (LTA) commencement date in line with SECI’s SCOD extension and extended the LTA by only five months only as per power ministry’s letter dated July 27, 2020—even though the Ministry of New and Renewable Energy (through its order dated February 9, 2021) allowed a further 5-month extension on case-to-case basis.
In its fresh submission to CERC, ACME said it is not liable to pay transmission charges as per the Regulation 13(3) of the 2020 Sharing Regulations in view of SCOD extension by SECI on account of force majeure events and PGCIL should be restrained from taking any coercive action against Acme including imposition of penalty.
“The contract is not frustrated, and the Petitioners (Acme) are not seeking discharge from the contract,” Acme said.
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