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					</table><p>The Odisha Electricity Regulatory Commission (<a href="https://www.orierc.org/(S(xy4yxfgzavm5cx0auppvbipv))/default.aspx" target="_blank" rel="noopener">OERC</a>) has said that a ten-year-old power purchase agreement (PPA) can remain in force even after the ownership of the solar project changed as a result of the insolvency of the previous owner.</p>
<p>The approval will allow the state to procure 5 MW of solar power for 25 years at a tariff of ₹7 (~$0.085)/kWh for fulfilling the renewable purchase obligation (RPO) target of GRIDCO.</p>
<p><a href="https://www.gridco.co.in/" target="_blank" rel="noopener">GRIDCO</a> had filed a petition seeking approval of the PPA signed with Alex Green Energy to procure 5 MW of solar power from the project located in the Bolangir district of Odisha toward fulfilling its RPO target.</p>
<p><strong>Background </strong></p>
<p>The state’s renewable energy development agency (OREDA) had floated a tender for 25 MW of solar projects in 2011. In the reverse auction, Alex Green emerged as one of the successful bidders, and the lowest tariff discovered was ₹7 (~$0.085)/kWh.</p>
<p>GRIDCO executed the PPA with Alex Green Energy on May 26, 2012, to set up one unit of 5 MW in the Bolangir district of Odisha.</p>
<p>The amended PPA was signed on November 25, 2013.</p>
<p>The project got commissioned on August 19, 2014, and has been supplying power to GRIDCO since then.</p>
<p>Later, Alex Green Energy was referred to the National Company Law Tribunal (NCLT), Kolkata, to initiate the corporate insolvency resolution process. Subsequently, <a href="https://fortischemicals.com/" target="_blank" rel="noopener">Fortis Chemicals</a> stepped in as the new owner and has been managing the project since August 29, 2020.</p>
<p>Alex Green Energy submitted that since the tariff of ₹7 (~$0.085)/kWh was discovered through a competitive bidding process and as per the order of NCLT, the PPA should continue, and the question of price variation did not arise.</p>
<p>OREDA, in its reply, said that the tariff discovered in the bidding process was the lowest at the time, and the benchmark tariff in 2011 was ₹15.39 (~$0.186)/kWh.</p>
<p>GRIDCO, in its reply, stated that the Tata Power Western Odisha Distribution had proposed renegotiating the tariff of ₹7 (~$0.085)/kWh with the solar developer at par with the market trend prevalent at the time. The said tariff was discovered through competitive bidding during FY 2011-12 when the solar tariff was relatively high.</p>
<p><strong>Commission&#8217;s analysis </strong></p>
<p>The Commission observed that the tariff discovered through a competitive bidding process was ₹7 (~$0.085)/kWh, which was one of the lowest at the time.</p>
<p>The Commission added that the project was out of service for almost two years and could not supply guaranteed generation to GRIDCO due to severe damage caused during a heavy storm. The commercial operation could not be resumed within 100 days, and NCLAT rejected the PPA termination notice of GRIDCO.</p>
<p>Later, Fortis Chemicals was approved by the committee of creditors and was given control over the management of Alex Green Energy to resume the project&#8217;s operation in August 2020.</p>
<p>The state regulator noted that the project&#8217;s operation was resumed on August 29, 2020, and the power from the project has been supplied to GRIDCO under the new management of Fortis Chemicals.</p>
<p>Considering the facts, OERC granted approval to GRIDCO for the procurement of power from the 5 MW solar project at a rate of ₹7 (~$0.085)/kWh on the same terms and conditions as laid down in the original PPA under the new management of Fortis Chemicals.</p>
<p>Last September, OERC had <a href="https://mercomindia.com/odisha-regulator-allows-gridco-purchase-200-mw-solar-rpo/" target="_blank" rel="noopener">approved</a> the power sale agreement to be executed between GRIDCO and NTPC for 200 MW of inter-state transmission system (ISTS) connected solar projects to fulfill its RPO targets.</p>
<p>Subscribe to Mercom&#8217;s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates </a>to ensure you don&#8217;t miss any critical updates from the renewable industry.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/rakesh-ranjan-parashar/" class="vcard author" rel="author"><span class="fn">Rakesh Ranjan</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/02/Rakesh-Headshot-crop-2.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Rakesh Ranjan,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" target="_blank" rel="noopener">More articles from Rakesh Ranjan.</a></p>
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<p><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/02/Rakesh-Headshot-crop-2.jpg" width="77" height="102" /><a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" target="_blank" rel="noopener"><strong style="color: #00b451">Rakesh Ranjan</strong></a> is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). <a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" rel="noopener noreferrer">More articles from Rakesh Ranjan.</a></p>
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Regulator Allows Old PPA to Continue After Change in Solar Project Ownership

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