Load shedding: ReNew Power cancels its PPA for Tamil Nadu plant

The project was scheduled to be commissioned on February this year, but the company said that the aforementioned delays made it impossible to meet the timeline.

ReNew Power, the country’s largest renewable power company, has unilaterally terminated the power purchase agreement (PPA) signed with the Solar Energy Corporation of India (SECI) for its  upcoming 265 mega-watt (MW) Tamil Nadu-based  wind project.  The company said that the PPA was being cancelled because of force majeure events such as the impact of the coronavirus outbreak on the supply chain and delays by other parties in land allocation and building associated power transmission network.

The project was scheduled to be commissioned on February this year, but the company said that the aforementioned delays made it impossible to meet the timeline. The company has appealed the power regulator CERC to restrain SECI from encashing the performance bank guarantee.

However, SECI has disputed the unilateral termination of the PPA by ReNew Power, stating the various events cited by the company are not considered as force majeure in terms of the PPA. ReNew terminated the PPA on July 26.
CERC has directed SECI not to take any coercive measure against the company till the next date of hearing. The plant was to sell electricity at Rs 2.52/unit. The project is a part of the fourth tranche of SECI auction for 2,000 MW of wind power held in April 2018, when the second lowest wind tariff of Rs 2.51/unit was discovered for a pan India project. More than 1,430 MW were awarded to Srijan Energy Systems, Sprng Energy, BLP Energy, Betam Wind, Inox Wind and Adani Green Energy while Mytrah Energy and ReNew Power signed contracts to build the remaining capacity for Rs 2.52/unit.

In the recent years, most of the renewable capacity have been added through solar plants while wind capacity addition has gradually moderated (2,068 MW added in FY20, 1,580 MW in FY19, 1,766 MW in FY18 and 5,502 MW in FY17). Lower capacity addition has been attributed to the transition of wind sector from feed-in tariff regime to transparent competitive bidding mechanism and issues relating to land acquisition in certain states and lack of adequate transmission infrastructure. The Indian energy arm of Singapore-based Sembcorp Industries recently announced the commissioning of all the 800 MW of wind power projects in Tamil Nadu and Gujarat which it had won in the first three auctions conducted SECI.