ACME solar

ACME Solar Terminates Its Lowest Tariff Project

ACME Solar has cancelled a contract with state-run Solar Energy Corp of India (SECI) to supply power at the country’s lowest tariff due to project delays and uncertainty over the coronavirus, it told the federal electricity regulator.

ACME cited land acquisition delays, the coronavirus outbreak and its impact on suppliers of solar cells and modules in China and delay in setting up of transmission networks as reasons for terminating the contract under “force majeure”.

They argued that the PPAs could stand terminated if force majeure event or its effect continues for more than three months. So, the developers have validly terminated the PPAs.

Since the force majeure event releases the parties from their obligations, no amount is due to either SECI or PGCIL, the petition added.

ACME’s winning bid of 2.44 rupees ($0.0323) to set up a 200 megawatts (MW) capacity in the northwestern state of Rajasthan in 2017 helped dragged down solar energy prices in India, which some developers say are too competitive.

The company equaled its record low bid the following year and signed an agreement in December 2018 to supply power. It terminated the contract on May 4, according to a copy of an order on last week’s hearing uploaded on the regulator’s website.

“The projects have already been delayed by 15 months and further delay will continue on account of uncertainty due to COVID-19,” ACME’s counsel was quoted as saying in the order of the Central Electricity Regulatory Commission (CERCI).

It has asked the regulator to direct the Solar Energy Corporation of India (SECI) and the Power Grid Corporation of India Limited (PGCIL) to refrain from invoking its bank guarantees and letters of comfort.

Reference- Mercom India, Economic Times, Business Standard