In the ongoing legal battle between the Solar Energy Corporation of India Limited (SECI) and Wind Four Renergy Private Limited (WFRPL) over a green energy project, the recent judgment by the Appellate Tribunal for Electricity has raised critical issues regarding project timelines and obligations. SECI, acting as the implementing agency, and WFRPL, the project developer, are locked in a dispute over deadlines and delays impacting the commissioning of a wind power unit. The outcome of this case will have far-reaching implications for the renewable energy sector and the push towards reducing carbon footprint through green energy initiatives.
Facts
- The Solar Energy Corporation of India Limited challenges the judgment by the Appellate Tribunal for Electricity allowing Wind Four Renergy Private Limited to commence the condoned delay period from the date of the judgment.
- Ministry of New & Renewable Energy provided concessions and extensions for wind power projects.
- CERC accepted the extension contention of WFRPL, affecting the additional time allowed and the last date for commissioning.
- WFRPL’s appeal before APTEL was allowed, starting the condoned delay period from the date of APTEL’s judgment.
- There were 5 PPAs signed on 21.07.2017 of 50 MW each between the parties.
- WFRPL is entitled to an extension until 13.06.2019 as per the letter dated 22.10.2019.
- WFRPL sought an extension of 132 days post the operationalization of LTA due to lack of information regarding the LTA’s commissioning by the appellant.
- The extension period is for completing commissioning activities after the inter-state transmission system is ready.
- SECI and Power Trading Company India Limited entered into five Power Purchase Agreements dated 21.07.2017 for wind power generation units in the same vicinity.
- Commissioning deadline for the PPAs was 27 months from LoA, allowing commissioning till 05.07.2019.
- Four PPAs have been operationalized, while this appeal and order relate only to the 5th PPA.
- SECI, the implementing agency, accepted the order for establishing a 50 MW wind power unit for PTC.
- Power Grid Corporation of India Limited failed to operationalize Long Term Access required for the PPAs.
- Scheduled Commercial Operation Date was 04.10.2018, 18 months from the Letter of Award.
- WFRPL was entitled to additional time with liquidated damages and tariff reduction up to 9 months, till 05.07.2019.
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Analysis
- WFRPL had initially set a deadline of 31.05.2019 for project commissioning, subject to evacuation system readiness.
- Evacuation systems were reported as ready by 14.04.2019 according to WFRPL’s letter.
- The power station commissioning deadline was extended to 30.06.2019.
- WFRPL admitted to not having operationalized the power generation unit as of the current date.
- The PPA for wind power generation units has not been operationalized by WFRPL.
- The tariff of green energy has significantly reduced.
- Timelines are crucial for the early supply of green energy.
- The objective is to reduce carbon footprint with the help of green energy.
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Decision
- The CERC order dated 08.03.2021 is restored and will be binding on the parties.
- The direction in the impugned judgment regarding the 132 days period starting from the date of APTEL order is deemed irrational.
- SECI had refunded Rs.10 crores to WFRPL as per the impugned judgment, which was encashed from the performance bank guarantee.
- SECI is entitled to recover the refunded amount with 12% per annum interest from the date of payment until refunded by WFRPL.
- If the refunded amount and interest are not repaid within six months, SECI can recover Rs.10 crores plus interest as per Electricity Act, 2003 provisions.
- In case of default, the principal amount of Rs.10 crores along with 12% per annum interest will be treated as electricity dues and recovered accordingly.
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Case Title: SOLAR ENERGY CORPORATION OF INDIA LIMITED (SECI) Vs. WIND FOUR RENERGY PRIVATE LIMITED (2024 INSC 160)
Case Number: C.A. No.-002451 / 2022
