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CERC Grants Rs2 Crore Compensation to Beempow Energy for GST Hike

The Central Electricity Regulatory Commission (CERC) has recognized the increase in Goods and Services Tax (GST) from 5% to 12-18% as a change in law event, granting Beempow Energy (backed by O2 Power) Rs2 Cr in compensation. The amount will be paid over 15 years at a 9.12% discount, along with carrying costs for the GST-paid period.

Beempow Energy, which developed a 350 MW solar project in Agar Solar Park, Madhya Pradesh, signed PPAs with Madhya Pradesh Power Management Company and West Central Railways at a tariff of Rs2.4/kWh in September 2021. The GST hike, effective from October 2021, increased costs for solar modules and components.

CERC directed the discoms and Rewa Ultra Mega Solar to start payments within 60 days, warning of late payment surcharges for delays. The decision underscores risk allocation in renewable projects to maintain financial viability.