KREDL to Penalize Delays, Amends Guidelines for 860 MW Solar PV Tender

If project commissioning is delayed by three months, then the tariff in the PPA will fall to 80 percent of the tariff quoted by the project developer


Karnataka Renewable Energy Development Limited (KREDL) has amended the regulations for 860 MW of grid-connected solar photovoltaic (PV) projects that were tendered in December 2017 for 43 taluks in the state.

A KREDL official told Mercom that the amendments aim to provide clarity to participants and enable a hassle-free process for the efficient implementation of projects in the state.

In the amendment, KREDL fixed the benchmark tariff for the tender at ₹3.57 (~$0.056)/kWh and added a provision that penalizes developers for failing to commission projects on time.

The new terms state that if project commissioning is delayed by three months, then the applicable tariff for the Power Purchase Agreement (PPA) will fall to 80 percent of the tariff quoted by the project developer.

“Through the new amendments, we have also clarified what the project developers can expect in case of delays in project commissioning. It is a clear statement and will ensure that no dispute arises between the off-taker and the developer,” the KREDL official said.

The KREDL official further added that the aim behind this amendment is to make Karnataka a model state where project developers are willing to invest. “This can be done by simplifying policies and explaining every miniscule point of contention and this is what we have done in this tender,” the official said.

“There has been a lot of back and forth as to who is causing project delays. Mercom has reported that almost 1 GW of projects were delayed at the end of 2017, but mostly developers have blamed excessive bureaucracy and grid evacuation delays. If a project is delayed in this tender the next point of contention could be who is to blame?” said Raj Prabhu, CEO of Mercom Capital Group.

According to Mercom’s India Solar Project Tracker, Karnataka had ~2.7 GW of large-scale solar installations as of December 2017, and the largest project development pipeline in the country of around 1.6 GW.


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