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ACME Solar junks PPAs to set up 600 MW solar projects


Press Trust of India  |  New Delhi 

Clean energy firm ACME Solar has terminated solar energy projects with 600MW power generation capacity in Rajasthan, which it bagged at historic low tariff of Rs 2.44 per unit in 2018.

The company has filed a petition with the CERC, seeking directions to Solar Energy Corporation of India Ltd (SECI) and Power Grid Corporation of India Ltd (PGCIL) not to encash bank guarantees and letters of comfort submitted by the company and to return them back, showed a copy of an order of the power regulator.

Central Electricity Regulatory Commission (CERC) heard the matter and issued an interim direction to "SECI and PGCIL not to take any coercive measure against" the company till the next date of hearing.

The CERC has also asked the company to keep the letter of comfort and bank guarantee valid.

The matter is still sub-judice in the CERC and the notice for further hearing on the case would be issued.

The SECI, which is the nodal agency for conducting auctions for solar projects, had floated a tender for setting up of grid-connected solar PV Projects for 3,000 MW capacity on February 27, 2018.

ACME Solar bagged two 300 MW solar power projects under the auction and inked power purchase agreements (PPAs) with SECI. The company terminated the PPAs on May 4, 2020 on account of the force majeure events.

These force majeure events are -- status quo orders by the Rajasthan High Court qua land on which Fatehgarh Substation was to be constructed, outbreak of COVID-19 and its adverse impact on manufacturing facilities of suppliers since December 2019 including lockdown in China and India, and delay in commissioning of associated transmission network elements by other Transmission Service Providers.

J Sagar Associates (JSA) is representing ACME in proceedings pertaining to termination of solar PPAs with SECI and Discoms due to delays and disruption caused by COVID.

"The ensuing lockdown in China and India have not only delayed construction of these projects but also made it impossible to access critical equipment including solar panels from China.

"With Chinese manufacturers unable to commit to a firm timeline and uncertainty over resumption of supplies, most projects will be delayed beyond the scheduled commissioning date. COVID related disruptions will also impact cost of such projects. That coupled with the decrease in power demand and financial health of discoms may have a significant impact on growth in the renewable sector," Vishrov Mukerjee, Partner at JSA said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, May 20 2020. 20:43 IST