AEML-D Wins SCOD Extension for 700 MW Hybrid Project Due to Force Majeure Events

Posted On - 3 June, 2024 • By - King Stubb & Kasiva

Summary

The Maharashtra Electricity Regulatory Commission (MERC) ruled in favor of Adani Electricity Mumbai Limited-Distribution (AEML-D) in Case No. 33 of 2023, allowing the actual commissioning date of October 1, 2022, to be considered as the extended Scheduled Commissioning Date (SCOD) for a 700 MW Renewable Energy Hybrid Project.[1] The MERC recognized that various force majeure events, including the COVID-19 pandemic, court orders, and transmission constraints, caused delays beyond the control of the project developer.

Case Timeline

  • February 7, 2023: AEML-D filed a petition seeking extension of the SCOD.
  • September 5, 2023: E-hearing held to discuss the case.
  • February 6, 2024: State Transmission Utility (STU) submitted a reply.
  • February 9, 2024: Final hearing held.
  • May 22, 2024: MERC issued its order.

Issues Raised

  • Whether the project delays were caused by force majeure events.
  • Whether AEML-D’s extension of the SCOD timeline was justified.
  • Whether AEML-D was entitled to carry forward its Renewable Purchase Obligation (RPO) targets.

Appellant’s Arguments

AEML-D argued that the project delays were due to several force majeure events, including the COVID-19 pandemic, court injunctions, and transmission constraints. These events were beyond the control of the project developer and justified an extension of the SCOD.

Respondent’s Arguments

The STU argued that while there were initial transmission constraints, the project was eventually commissioned and power flow was established. The STU also noted that the Central Electricity Regulatory Commission (CERC) had granted additional General Network Access (GNA) to Maharashtra, allowing the power to be procured through Long Term Open Access (LTOA) from October 1, 2023.

Order

The MERC ruled in favour of AEML-D, allowing the actual commissioning date of October 1, 2022, to be considered as the extended SCOD. The MERC noted that the project had been commissioned and power flow was established, demonstrating AHEJ4L’s efforts to complete the project. The MERC also considered the MNRE notifications that allowed for extensions of SCOD up to March 2024 for projects facing similar challenges.

Analysis

The MERC’s decision provides clarity and certainty to renewable energy project developers facing unforeseen delays due to force majeure events. It also highlights the importance of considering the specific circumstances of each case when determining whether an SCOD extension is justified. This ruling could have implications for future renewable energy projects in India, as it establishes a precedent for how force majeure events can be considered in the context of project timelines and RPO compliance.

[1] https://merc.gov.in/wp-content/uploads/2024/05/Order-Case-No.-33-of-2023.pdf