Gujarat Shows Leniency, Grants Several Extensions to 25 MW Solar Thermal Project

The project’s PPA was executed on April 2010 and the new commissioning date is December 31, 2019


Taking a lenient view, the Gujarat Electricity Regulatory Commission (GERC) has extended the scheduled commissioning date of a 25 MW of grid-connected solar thermal project a number of times.

The project was being developed by Cargo Solar Power (Gujarat) Pvt. Ltd. (CSPL). The power purchase agreement (PPA) for this capacity had been executed between Gujarat Urja Vikas Nigam Limited (GUVNL) and CSPL on April 30, 2010.

The GERC was reviewing a petition filed by CSPL requesting the GERC to extend the time limit for the scheduled commercial operation date (SCOD) to December 31, 2018.

CSPL had requested the GERC to consider the proposed changes in the definition of construction default date, SCOD, Article 2.2 (Pertaining to licenses, permits and conditions precedents), Article 4.3 (Pertaining to liquidated damages for delay in commissioning the project beyond SCOD).

While examining the petition, the GERC observed that the dispute was concerning the extension of SCOD, commercial operation date, and the non-levy of the liquidated damages.

 Case Background

In 2011, CSPL had filed a petition seeking an extension of the scheduled commissioning date, and non-levy of liquidated damages. The GERC had then extended the date to July 31, 2013, on the ground of force majeure (unforeseeable) events. The GUVNL had then approached the Appellate Tribunal for Electricity (APTEL) requesting an intervention but APTEL approved GERC’s order.

Again in 2013, CSPL sought an extension of the date to December 31, 2015, and the GERC obliged yet again. The GUVNL did not challenge the order the time.

In 2015, CSPL approached the commission for another extension due to force majeure conditions and was provided with an extension up to June 30, 2017. The commission, after hearing the parties, granted the extension in SCOD, construction default and also directed GUVNL to not encash the bank guarantee provided by CSPL.

Later, CSPL approached the GUVNL for yet another extension and the GUVNL pushed back. This led to the filing of the petition in question.

While arriving at the current order, GERC noted that the force majeure event in the form of delay of statutory approval from the government authorities. Therefore, CSPL will not be held liable to pay the liquidated damages in case of an extension of SCOD due to this delay.

CSPL had also submitted an undertaking stating that if relief is provided now, it will not no longer approach any authority for further extensions.

Consequently, the GERC provided CSPL with one last opportunity and extended the scheduled opening date to December 31, 2019. The GERC directed CSPL to ensure the progress of the project and keep the commission and GUVNL abreast at regular monthly intervals.

The commission has also directed CSPL to provide a bank guarantee to GUVNL valid for up to three months after the revised SCOD of December 31, 2019.

Recently GERC took another lenient stance when it approved Torrent Power’s petitions for the acceptance of deviations from the Ministry of Power (MoP)’s guidelines for the procurement of solar and wind power.

Image credit: Masdar Official [CC BY-SA 2.0], via Wikimedia Commons