First Green Consulting Pvt Ltd News Letter SunEdison, Adanis miss March 31 project commissioning deadline in TN

SunEdison, Adanis miss March 31 project commissioning deadline in TN

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Some projects of SunEdison and Adani Power, both of which are building solar projects in Tamil Nadu, have technically missed the March 31 deadline for commissioning. This is a big blow, as those projects would consequently be ineligible for the lucrative tariff of ₹7.01 a kWhr. SunEdison has confirmed that its 50 MW ‘Kathiravan’ plant is stuck in the issue. The company was building 190 MW under the ₹7.01-a-unit feed-in tariff regime. SunEdison has completed and grid-tied 125 MW and could not complete another 15 MW. However, the 50-MW Kathiravan project was made ready for commissioning well before the deadline, but could not be connected to the sub-station due to delay in the State government giving certain approvals. SunEdison believes it is not at fault and intends to “approach the state electricity regulatory commission”, if the project is made ineligible for the tariff. Apart from the 190-MW, SunEdison has another 25 MW of solar projects in the State, which includes rooftop plants. Adani Power also faces identical problems. Sources in Tangedco confirmed that to BusinessLine and put the capacity of projects stuck in a similar issue at “around 250 MW”. The company had set out to building 690 MW, and has completed all the rest. Controversial tariff If the companies lose the case with the regulatory commission and the Courts, the projects produce will be paid a yet-to-be-fixed tariff, which is expected to be much lower. The tariff of ₹7.01, which has been the subject of a controversy, is believed by industry experts to be highly lucrative to solar power companies, but works to the detriment of the State’s Exchequer. The tariff was fixed by the State’s electricity regulator on September 12, 2014, and was to be applicable to projects that deliver power to the grid by September 12, 2015. However, the deadline was extended till March 31, 2016, in view of the fact that there were delays on the part of the regulator in approving the standard Power Purchase Agreement. However, even in September 2014, solar companies were quoting much lower tariffs. The ruling tariffs then were between ₹6 and ₹6.50. Prices of solar modules, and in consequence, the tariffs quoted in bids, have since fallen steeply, and today a company that gets ₹5 a kWhr is said to be lucky. The eyebrow-raising tariff kicked up a controversy with political opponents saying the State was over-paying. One of the three members of the regulatory commission S Nagalsamy, issued a dissent note, saying that a tariff of ₹7.01 could cause a loss of ₹23,000 crore to the state-owned Tangedco. The tariff was approved only by majority, not by consensus.But even as the controversy raged, investors rushed to cash-in on the juicy tariff, and in 2015-16, Tamil Nadu emerged as the State where the most solar power was installed — 919 MW —accounting for 30 per cent of the 3,018-MW installed in the whole country in the year. Previously, the State had 107 MW.

Source:  The Hindu Business Line

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