Change in Wind Power Purchase Tariff – Prospective

Renewable Energy – Wind Power – Fixed long-term tariff for Wind Power Generators – Power Purchase Agreement of 29.3.2012 for fixed tariff of Rs.2.64 per unit for 25 years – Amendment of REC Regulations on 10.7.2013  to provide for tariff “at the pooled cost of power purchase” prospectively – Whether PPA require revision of PPA executed prior to 10.7.2013 – Whether the respondents were coerced to enter into PPA on 29.3.2012 – Standard of pleadings and evidence to establish coercion – 

On 29.1.2010 the Central Electricity Regulatory Commission (Terms and Conditions for Recognition and Issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations 2010 were framed for development of a power market for non-conventional sources of energy.

Regulations of 2010 provided for floor price and forbearance price i.e. minimum and maximum price for trading in the power exchange, to be determined by CRC for the entire country.

By the Order dated 30.1.2010, the Gujarat State RC had framed GRC (Procurement of Energy from Renewable Sources) Regulations 2010 and determined the tariff for procurement of power by distribution licences from wind generators.

On 29.3.2012, the power purchase agreement between the Appellant Gujarat Urja and Wind Power Developers including respondent no.1 Renew Wind Energy Rajkot Ltd, was executed for tariff at Rs.2.64 per unit for 25 years.

On 8.8.2012, the State Commission determined the tariff for procurement of wind power from the projects commissioned during the control period of 11.8.2012 to 31.3.2016.

On 11.7.2013, the Central Commission amended REC Regulations 2010 and provided for “pooled cost of power purchase” in place of “at a price not exceeding cost of the power purchase”.   It was, however, provided that this amendment will not affect PPAs already executed.

In 2013, first two respondents herein filed the petition in the State Commission for change of PPA terms in view of amendment in REC Regulations and for tariff as per the amendment of 10.7.2013.

This petition was allowed on the ground that the Order dated 11.7.2013 of CRC was in general and applicable to all wind power generators.

The appeal of the appellant was rejected by the order dated 6.12.2018 of the Appellate Tribunal and also review petition vide order dated 24.7.2020.   This was challenged by the appellant in the Supreme Court.  It was held that the respondents were coerced to enter into PPAs.

HELD – that the Power Purchase Agreements entered into voluntarily by the parties before the second amendment of 2013 were not affected by its terms and that there was no coercion or duress on the respondents to execute PPAs.  It was held that the findings of coercion were recorded without proper pleadings or proof or without probing into evidence. 

Civil Appeal Nos.3480-3481 of 2020 – Gujarat Urja Vikas Nigam Limited and others Vs. Renew Wind Energy (Rajkot) Private Limited and others