Treat Solar Power Project Contracts as Sacrosanct: MNRE Tells Haryana Government

Around 1,050 MW of open access solar projects have been allocated in the state


The Ministry of New and Renewable Energy (MNRE) has directed the state government of Haryana to honor all the allocations made to the solar power projects and solar parks and treat them as sacrosanct.

This latest directive comes on the heels of a letter submitted by Connect Solar on February 14, 2020, in which it had stated that since the last two years, renewable energy developers are being asked to invest in open access solar projects in Haryana and then the new projects are being canceled with newer conditions imposed on them, leading to considerable losses for the developers.

Connect Solar, in its letter, had stated that because of the regulatory hurdles created by the state distribution utility and the helplessness of the state government, the investors and developers are going to lose entire investment for no fault of theirs.

Around 1,050 MW capacity of solar power projects have been allocated in the state, and the developers have invested in the land and infrastructure for the projects. Around 380 MW of projects have been awarded final connectivity by Haryana Vidyut Prasaran Nigam Limited (HVPNL) and are in various stages of completion, with more than ₹20 billion (~$262.95 million) of investments at stake. For the rest of the 1,050 MW solar projects, applicants have already received in-principle approval and have invested a large amount of money on land and infrastructure and are waiting for final connectivity.

According to the letter, these investments have been backed by some of the leading investment firms like PETRONAS, International Finance Corporation (IFC), Asian Development Bank (ADB), Indian Renewable Energy Development Agency (IREDA), Tata Cleantech Capital, etc. The letter further argues that this situation could soon turn into what happened in Andhra Pradesh and cause a grave setback on the investments towards renewable energy in the country. As covered extensively by Mercom, the state government’s decision to renegotiate power purchase agreements in Andhra Pradesh caused a huge uproar among industry stakeholders, leading to intervention from the central government.

MNRE’s direction comes in support of the developers facing resistance from DISCOMs. According to developers, DISCOMs were leveraging their position, denying the signing of the connection agreement and grant of LTOAs (long term open access) to solar power parks and projects allocated by the HVPNL.

The central government has taken cognizance of the matter, and the MNRE, in its statement, added, “All agreements or contracts once signed, should be sacrosanct and honored unless a case of mala fide or corruption has been proved.”

After the directions issued by the state government, the developers in Haryana are hopeful that the matter will be resolved, and the state government will take the directions positively and honor the project allocations.

According to Mercom’s India Solar Project Tracker, Haryana has a total of 82.8 MW of solar projects in operation and 425 MW of projects in the pipeline.

Recently, the ministry also issued a clarification regarding the payment to renewable energy generating stations during the moratorium provided to distribution companies by the Ministry of Power. Given the pandemic, the Ministry of Power recently issued instructions providing for a moratorium period to DISCOMs for making payments to electricity-generating companies.

Image credit: Greenskies