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Projects under the National Solar Mission: NVVN review finds discrepancies in commissioning dates

Projects under the National Solar Mission: NVVN review finds discrepancies in commissioning dates

The National Solar Mission (NSM) has faced controversy with reports arising in the media of discrepencies in the dates of commissioning of some projects. Project commissioning dates are crucial as delays are penalized heavily under the policy. The NTPC Vidyut Vyapar Nigam (NVVN), the implementation agency of the NSM, has concluded an investigation into the controversy and has a released the list of commissioning dates of projects in Rajasthan.

  • The deadline for the commissioning of projects under batch one of phase one of the NSM was January 9th 2012
  • An NVVN investigation has found that out of the 20 projects in Rajasthan, 13 projects were actually commissioned after the deadline
  • The action by NVVN to provide clarity on this has been crucial in instilling confidence in the implementation of the regulations under the NSM

Under batch one of phase one of the National Solar Mission (NSM), PPAs were signed in the month of January 2011 for 28 Solar PV projects for a total capacity of 140MW. The deadline for commissioning of these projects was January 9th 2012. The responsibility for ascertaining the commissioning of these projects was entrusted to state nodal agencies in the respective states.

Reports then surfaced about discrepancies in the commissioning dates provided by state authorities in Rajasthan. Subsequently, a committee comprising of representative from state authorities and NTPC Vidyut Vyapar Nigam (NVVN) was constituted to ascertain the commissioning of 20 PV projects located in the state of Rajasthan.

Out of the 20 projects in Rajasthan, it has been found that 13 projects were actually commissioned after the deadline. It has been found that projects have been finally commissioned as late as March 3rd 2012.

 

Company name for delayed projects Earlier reported date of commissioning Actual date of
commissioning
Discrepancy found
Alex  Spectrum Radiation Not reported 21.02.2012 No
Amrit Energy (AAPL) Not reported 02.02.2012 No
DDE Renewable Energy 10.01.2012 14.02.2012 Yes
Electromech Maritech 10.01.2012 01.02.2012 Yes
Finehope Allied Energy 10.01.2012 07.02.2012 Yes
Greentech Power Not reported 08.02.2012 No
Indian Oil Corporation Not reported 02.02.2012 No
Khaya Solar Projects 09.01.2012 28.01.2012 Yes
Newton Solar 07.01.2012 09.02.2012 Yes
Oswal Woollen Mills 09.01.2012 10.01.2012 Yes
Precision Technik Not reported 22.03.2012 No
Saidham Overseas 09.01.2012 30.01.2012 Yes
Vasavi Solar Power 09.01.2012 02.02.2012 Yes

Source: MNRE, NTPC Vidyut Vyapar Nigam Limited (NVVN)

The NSM has a provision to draw the bank guarantees of projects in case of a delay in meeting the deadlines. The provision states that the NVVN can draw 20% of the total sum as a first tranche if a project is delayed by a month (January 9th – February 9th, 2012), 40% as a second tranche after two months (February 9th – March 9th 2012) and the remaining 40% as a third tranche after three months (beyond March 10th 2012). In addition, a penalty of INR0.1m (EUR1,540) per MW is to be levied for each day of delay beyond March 10th 2012. Bank guarantees have been en-cashed for the delayed projects as per the regulations.

The projects have been delayed as developers have struggled with on ground project execution challenges and securing non-recourse financing on time. The difference in the actual commissioning dates and those claimed by the developers suggests that the Rajasthan Renewable Energy Corporation Limited needs to provide clarity on its definition of commissioning. Further, it needs to be stringent in assessing the status of the projects in the state. The action by NVVN to provide clarity on this has been crucial in instilling confidence in the implementation of the regulations under the NSM.

For further analysis on project delays under the NSM, please read BRIDGE TO INDIA’s April 2012 edition of the India Solar Compass.

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