Actis-backed Sprng Energy wants to cancel 100 MW wind power purchase agreement with SECI

By: |
May 29, 2021 2:45 AM

Although the company, in its petition to the CERC, has not specified the project for which it wants to cancel the PPA, industry sources said the matter pertained to the 100 MW wind farm Sprng was to build in Dhar district of Madhya Pradesh.

Sprng Energy has also appealed the Central Electricity Regulatory Commission (CERC), seeking the release of its performance bank guarantee issued to SECI.Sprng Energy has also appealed the Central Electricity Regulatory Commission (CERC), seeking the release of its performance bank guarantee issued to SECI.

Sprng Energy, the Indian renewable energy platform set up by UK-based fund manager Actis, wants the termination of the power purchase agreement (PPA) signed with the Solar Energy Corporation of India (SECI) for its upcoming 100 mega-watt (MW) wind project. The company said it wanted the PPA to be cancelled because of the delay in the identification of a final buying entity and the restrictions on account of the on-going Covid-19 pandemic.

Sprng Energy has also appealed the Central Electricity Regulatory Commission (CERC), seeking the release of its performance bank guarantee issued to SECI.

Although the company, in its petition to the CERC, has not specified the project for which it wants to cancel the PPA, industry sources said the matter pertained to the 100 MW wind farm Sprng was to build in Dhar district of Madhya Pradesh.

The company was issued the letter of award for the project in June 2019 by SECI after it became one of the lowest bidders in the auction by quoting a tariff of Rs 2.82/unit. SECI being the national aggregator of renewable energy, signs PPAs with winning developers in competitive auctions, and subsequently inks power supply agreements (PSAs) with states to supply electricity from these plants.

SECI had entered into a PSA for Sprng’s 100 MW capacity with Kerala in September 2019.

The state electricity regulator of Kerala has not approved the procurement of this power, stating that it first wants to go through the terms of the PPA signed between SECI and Sprng. Kerala regulator not approving the PSA was identified as “one of the key uncontrollable issues” leading to Sprng’s petition for cancelling the PPA.

SECI had said in February 2020 the PPAs with the successful bidders of the related auction were yet to be executed. CERC has ordered Sprng to array the Kerala state electricity board as a party to the matter and the state discom will have to file its reply by June 17.

In August 2020, ReNew Power had applied to CERC for cancelling the PPA for a 265 MW wind project signed with SECI, and in May 2020, Acme Solar also wanted the regulator to terminate its PPA with SECI for solar projects scheduled to sell electricity at Rs 2.44/unit, which was the lowest-ever solar tariff discovered at that time. Analysts at Crisil have recently noted that PSAs for the 7,000 MW of renewable energy projects bid out at auctions before February 2020 are yet to be signed.

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