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Madhya Pradesh govt, 2 solar firms in legal row

State cancels all solar projects of SkyPower

Shreya Jai & Jyoti Mukul  |  New Delhi 


A delay in land acquisition has sparked disputes between the government and two companies with the state government cancelling the power purchase agreements for all projects of Global, a Canada-based company. The state government initiated a similar exercise against ReNew Power, which went to court against the cancellation and won the case.

Persons close to development said had ended its India operations, though it too had contested the cancellation of the power purchase agreements (PPAs) in the High Court. If it exits, will be the second overseas company after SunEdison to shut its Indian operations. Of its three projects, was able acquire land for only two, but after the stipulated 16 months. The state government cancelled all three projects on August 11, 2017. MP Power Management Company Limited (MPPMCL) had signed PPAs with the two solar project developers, South East Asia Holdings 2 Ltd (Mauritian arm of Global) and ReNew for three units of 50 Mw each and one unit of  51 Mw, respectively.

failed to procure land within the period stipulated in the PPAs. MPPMCL’s board issued the termination notice on August 11, 2017,” said a government official. Business Standard has reviewed the termination letter. In the case of ReNew, the termination notice was set aside by the High Court, Jabalpur, on August 18, after the company contested it. The commissioning date for ReNew’s project is September 7.

was last year looking for buyers to offload its equity in the MP projects. Calls did not go through to executives handling the Indian business of ReNew Power did not comment. “The PPAs were cancelled due to the non-fulfilment of terms and conditions of the agreements and not due to the unwillingness of MPPMCL to buy or a purported intention to renegotiate the PPAs for lower electricity tariffs,” said the official. 

recently proposed to take away the must-run status of renewable power in a draft regulation.
Both companies had bid record low tariffs in competitive bidding for projects. During the auction held in July 2015, bid Rs 5.05 per unit for the 50 MW project, the lowest then in the sector. It won 50 MW each at Rs 5.11/unit and Rs 5.30/unit. It later quoted Rs 5.17 per unit for a 50 Mw project in Telangana.

Dispute over land acquisition

* Of its three projects, was able acquire land for only two
* The government cancelled all three projects on August 11
* failed to procure land within the period stipulated in the PPAs
* MP Power Management Company had signed PPAs with solar project developers — South East Asia Holdings 2 and ReNew for 50 Mw power each

First Published: Thu, September 07 2017. 01:11 IST