Follow India Renewable Energy News on WhatsApp for exclusive updates on clean energy news and insights

APTEL Grants Relief to ACME Solar on Project Delay Due to COVID-19

The Appellate Tribunal for Electricity (APTEL) has condoned a 70-day delay in commissioning ACME Heergarh Powertech’s (AHPPL) 300 MW solar power project in Rajasthan, recognizing COVID-19 and supply disruptions in China as force majeure events. This decision overturns an earlier order by the Maharashtra Electricity Regulatory Commission (MERC) that imposed liquidated damages on AHPPL for the delay.

AHPPL, a subsidiary of ACME Solar Holdings, was awarded the project by Maharashtra State Electricity Distribution Company Limited (MSEDCL) and signed a power purchase agreement (PPA) to supply power at Rs2.72/kWh for 25 years. The PPA required the project to be commissioned within 24 months, with exceptions for force majeure events. Following the pandemic, the Ministry of New and Renewable Energy (MNRE) classified COVID-19 as a force majeure event, and MSEDCL extended the project’s commissioning deadline to December 2021.

However, due to continued supply chain disruptions in China, AHPPL requested a second extension until September 2022. MSEDCL granted an extension only until March 2022. When AHPPL sought further relief from MERC to avoid penalties, the commission extended the deadline by just 36 days and allowed MSEDCL to impose liquidated damages for the remaining period. AHPPL then approached APTEL to challenge this decision.

After reviewing the case, APTEL determined that the force majeure event lasted from November 2021 to March 2022, totaling 104 days, and extended the project’s commercial operation date to May 2022. As a result, APTEL dismissed MERC’s order imposing liquidated damages on AHPPL. The tribunal also criticized MERC for not conducting a thorough examination of the case.

This ruling sets a precedent for handling delays caused by global supply chain disruptions and reinforces the importance of clear regulatory guidelines for project extensions.