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The Gujarat Electricity Regulatory Commission has settled a dispute between Suzlon Global Services Limited and the Gujarat Energy Transmission Corporation Ltd regarding the procedure for granting connectivity to renewable energy projects and the refund of a Bank Guarantee worth ₹2.5 crores. Suzlon had approached the Commission after facing an unexpected obstacle that made it impossible to set up its proposed wind power project in Gujarat.
Suzlon had planned a 50 MW wind power project in Jetpur village for captive use and had followed the required process to obtain Stage-II Connectivity from GETCO at the 220 kV and 66 kV Gondal Sub-Station. As part of this process, Suzlon had submitted a Bank Guarantee to secure the connectivity. All steps were being followed as required until an external regulatory action changed the course of the project completely.
During the development stage, the Ministry of Defence, through the National Institute of Wind Energy, issued a notification on its website declaring the project site in Jetpur as a “No Wind Turbine Generator Zone.” This declaration meant that installing wind turbine generators or constructing the dedicated transmission line needed for the 50 MW project was no longer possible. The area was now off-limits for wind power installation, leaving Suzlon unable to carry out any further development.
Suzlon argued before the Commission that this development was a clear case of force majeure, which refers to events outside the control of both parties. They stated that since an external authority had placed a restriction on the land, the company could not continue the project in any form. They also argued that because the project had been made impossible due to this unexpected notification, the Bank Guarantee should be refunded, as they were not at fault.
The Commission examined the details carefully and agreed that the Ministry of Defence’s decision had completely stopped the project from moving forward. The Commission also noted that neither Suzlon nor GETCO could have foreseen or prevented the issuance of the “No WTG Zone” declaration. It was an external regulatory action that had an immediate and unavoidable impact on the viability of the project.
Considering these facts, the Commission held that since the project could not be carried out due to reasons beyond the control of the developer, the Bank Guarantee could not be held back by GETCO. The Commission ruled that GETCO must return the Bank Guarantee of ₹2.5 crores to Suzlon Global Services Limited.
This order provides clarity for renewable energy developers who may face similar situations. It confirms that when a project becomes impossible to execute because of an external factor introduced by a competent authority, the developer should not suffer financial loss in the form of a forfeited Bank Guarantee. The ruling also highlights the importance of fair regulatory treatment, especially in cases where developers face sudden policy or regulatory changes that directly affect project execution. This decision marks a clear conclusion to the issue raised by Suzlon and removes the financial uncertainty around this specific regulatory barrier.
