CERC Provides Relief to a 50 MW Solar Thermal Project Delayed Due to Drought

NVVN had asked for liquidated damages of ₹471 million for the delay in supply of power


The Central Electricity Regulatory Commission (CERC) has extended the scheduled commercial operation date (SCoD) of a 50 MW solar thermal project in Andhra Pradesh.

Megha Engineering & Infrastructures Limited (MEIL) had requested the extension because of the drought in the region. It has also asked the NTPC Vidyut Vyapar Nigam Limited (NVVN) not to encash the performance bank guarantee until the disposal of another petition filed by NVVN in the same matter.


Back in 2011, the petitioner had executed the power purchase agreement with NVVN for its 50 MW solar thermal power project in the Anantapur district of Andhra Pradesh.

The SCoD was revised to March 09, 2014, after the Ministry of New and Renewable Energy (MNRE) gave a general extension of 10 months and revised the SCoD to 38 months instead of 28 months. On November 04, 2014, the petitioner achieved the commissioning of its 50 MW solar thermal project but with a delay of about 240 days.

MEIL had filed a petition in 2014 seeking the extension of SCoD of its project based on the notification dated January 9, 2013, issued by the government of Andhra Pradesh in which the government had declared that the area in which project was situated to be drought-affected.

In 2017, the Commission allowed MEIL’s request for the extension of SCoD and directed NVVN to ascertain the duration of the drought based on the notification issued by the government.

NVVN, in its reply, had stated that as the petitioner had been unable to start the supply of power to NVVN by the SCoD, the petitioner should pay the liquidated damages for the delay. This amounted to  ₹471 million (~$6.63 million) for three months 25 days’ work as a principal and in addition to the delayed payment surcharge.

Later, NVVN filed an appeal before the Appellate Tribunal for Electricity (APTEL) against the Commission’s order, which is pending for hearing. NVVN also filed an application for the stay and has also disputed the claim of the petitioner.

Since the separate petition is still awaiting adjudication, the commission directed NVVN not to encash the performance bank guarantee until the disposal of the petition and the petitioner was also directed to keep the performance bank guarantee valid.

A month ago, the central body agreed with a petition that argued that a hold-up in road construction by the state government delayed the project commissioning, which was beyond the control of the solar developers. The commission also ordered that the liquidated damages will be levied for two projects of 10 MW each after ascertaining the number of delays the project was delayed.

Previously, the CERC ruled in favor of three independent power producers for the payment of their performance bank guarantee to the tune of ₹255 million ($3.7 million). The three IPPs had petitioned the CERC seeking the release of the performance bank guarantees retained by the NTPC. They had also requested for the extension of time and deferral of the scheduled commissioning date for two solar power projects of 70 MW capacity in Bhadla Solar Park, Rajasthan.


Image credit: Bkwcreator [CC BY-SA]