Wind Project in Maharashtra Gets Extended for Due to COVID 19

0
4769

The Maharashtra Electricity Regulatory Commission (MERC) extended the commissioning date of the 76.5 MW wind project being developed by Clean Wind Power (Bhavnagar) Private Limited on the grounds of force majeure events.

The regulatory body extended the commissioning date by five months from June 23, 2020, to November 23, 2020.

The Commission directed Clean Wind Power to submit a new performance bank guarantee (PBG) with a validity of six months beyond the extended date of commissioning to the Maharashtra State Electricity Distribution Company Limited (MSEDCL) within a month.

Earlier, Clean Wind Power had filed a petition seeking the extension of the commissioning date on account of force majeure events for the outbreak of the COVID-19 pandemic, which prevented it from fulfilling its obligations under the power purchase agreement (PPA).

Clean Wind Power is a special purpose vehicle of Hero Wind Energy Private Limited to develop a wind power project of 75.6 MW capacity at Anjanandi in the Aurangabad district of Maharashtra.

Hero took part in the bidding process and was declared the successful bidder for the project. Clean Wind Power and MSEDCL executed the power purchase agreement (PPA) on July 17, 2018, at a tariff of ₹2.86 (~$0.04)/kWh.  Clean Wind Power had appointed Suzlon Energy Limited as its engineering, procurement, and construction (EPC) contractor.

The developer could not meet the criteria for achieving financial closure due to force majeure events, including the delay in getting approval from MSEDCL to obtain grid connectivity from Maharashtra Energy Development Agency (MEDA) and delay in acquiring land for setting up the project.

In its order dated January 20, 2020, the Commission considered the delay in obtaining grid connectivity a force majeure event and allowed the extension of time to achieve commissioning by June 23, 2020.

Clean Wind Power, through Suzlon, had procured 15 parcels of land for the project. However, despite the extension granted by the Commission, Suzlon was unable to make progress in the procurement of land due to the lockdown.

MSEDCL, in its submission, stated that any relaxation in terms of PPA could only be provided by the provision made under the force majeure clause of the PPA. The state DISCOM said that Clean Wind Power was not entitled to any benefits as the Ministry of Home Affairs (MHA), in its order on April 15, 2020, had made it clear that the construction of renewable energy projects would be allowed. MSEDCL added that other reasons cited by Clean Wind Power for failure to achieve scheduled operation date (SCOD), such as delay in receipt of wind turbine generator components, delay in availability of connectivity, delay in procurement of land, and non-availability of workforce fall under force majeure exclusions clause of PPA. So, any reliefs sought on these grounds are not tenable.

On the other hand, Clean Wind Power said that Aurangabad district had been declared as a hotspot, and MHA’s order dated April 15, 2020, was not applicable in the case.

The wind developer further added that as on March 31, 2020, it had cumulatively incurred an amount of approximately ₹297.2 million (~$4.04 million) toward interest on all the loans availed by it for implementing the project.

The Commission, in its earlier order, had accepted the delay in grid connectivity as a force majeure event and extended the SCOD by 158 days.

Further, the Commission noted that to claim relief under the force majeure clause, the affected party must give notice within seven days from the date of the commencement of the force majeure event, and Clean Wind Power had complied with it.

The state regulator said that Clean Wind Power had submitted various documents to establish that even after relaxation in lockdown, Aurangabad being a hotspot area, restrictions on the movement of the public continued.

Accordingly, the Commission directed MSEDCL to extend the commissioning date of the project by five months from June 23, 2020, to November 23, 2020. Further, the Commission directed Clean Wind Power to provide a bank guarantee having validity for the extended SCOD.

The Commission also noted that the ultimate impact of the delay in commissioning the project is the imposition of liquidated damage on the generator, which includes forfeiting PBG for a delay of six months, and further delay would lead to a reduction in tariff by ₹0.50 (~$0.007)/kWh per day of the delay. Therefore, the exact dates between which the generator is affected by the force majeure events are critical.

The regulatory body directed MSEDCL not to invoke the bank guarantee for not achieving financial closure at this point and allow Clean Wind Power to commission the project by November 23, 2020.

Previous articleRajasthan Electronics Floats Tenders for Multicrystalline Solar Cells
Next articleSunAlpha Energy enabling job opp post lockdown 4.0 amidst ongoing Covid-19 pandemic

LEAVE A REPLY

Please enter your comment!
Please enter your name here