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Vaayu Renewable Energy (Mevasa) Private Limited (VREMPL) has sought relief from the Central Electricity Regulatory Commission (CERC) under the Electricity Act, 2003, and related regulations. The company filed a petition to relinquish its Stage-II Connectivity for a 300 MW Wind Farm Project in Dharampur, Jamnagar, Gujarat, citing events that have made the project impossible to execute.
In the petition, VREMPL explained that it applied for Stage-I and Stage-II Connectivity in 2018, and the Respondent granted Stage-I Connectivity for the Wind Farm Project. However, due to unforeseen events such as changes in land policies in Gujarat, restrictions imposed by the government, and delays in the construction of the transmission infrastructure, VREMPL faced significant challenges in achieving financial closure and project execution.
The company highlighted that the COVID-19 pandemic further impacted the timeline, and the transmission infrastructure’s completion was uncertain. Additionally, the Solar Energy Corporation of India (SECI) issued guidelines in December 2020 that prevented projects, including VREMPL’s, from participating in competitive bidding.
Despite VREMPL’s efforts to seek an extension and explain the hindrances faced, the Respondent allegedly blamed the company for non-compliance, leading to the present situation where the project has become impractical to pursue.
VREMPL argued that the circumstances go beyond a mere attempt to exit the project; the foundation of the agreement has been eroded due to external factors. The company suggested reallocating the allocated bay to other users, such as Reliance Industries Limited (RIL), which had expressed interest in the connectivity.
During the hearing, the Commission acknowledged the petition and instructed the Power Grid Corporation of India Limited (PGCIL) not to take coercive measures against VREMPL until further notice.
In response, PGCIL outlined the mandatory milestones for connectivity grantees and emphasized that failure to meet these milestones could lead to revocation of Stage-II Connectivity. PGCIL argued that VREMPL did not consider the change in land allotment policy as a force majeure event when seeking an extension, and the issue was already settled in a previous order.
PGCIL also addressed VREMPL’s contentions regarding the allocation of bays to other users, stating that once connectivity is granted, the grantee cannot rely on other users for bay utilization. Additionally, PGCIL noted that no action had been initiated for revocation or bank guarantee invocation at that point.
The Commission, after considering the submissions, concluded that VREMPL failed to achieve the required milestones. However, it noted that no action for revocation or bank guarantee invocation had been initiated by PGCIL. The Commission directed PGCIL to take appropriate action within 15 days in accordance with the Revised Procedure issued in February 2021.
In essence, the Commission’s decision implies that VREMPL’s Stage-II Connectivity will be revoked, and the associated bank guarantee will be encashed, as per the provisions of the Revised Procedure. The Commission’s decision aligns with the regulatory framework and emphasizes the importance of meeting connectivity milestones for renewable energy projects.
Please view the document here for more details.
