Kerala Commission approves PPA for a 110 MW Solar Project with Tata Power

The power purchase agreement (PPA) signed between the Kerala State Electricity Board (KSEB) and Tata Power Company for procuring 110 megawatts (MW) of solar power at the rate of Rs 2.97/kilowatt-hour (kWh), which has been hanging fire for a while has finally been approved by the Kerala State Electricity Regulatory Commission (KSERC) recently.

KSEB will sign the PPA with TP Saurya, a wholly-owned subsidiary of Tata Power Company, and is directed to submit a copy of the same with the Commission.

The cause for the contention arose from the fact that when KSEB had floated a tender to procure 200 MW of solar power in September 2020. NTPC and Tata Power were declared the successful bidders in the reverse auction. NTPC was awarded 90 MW at Rs2.97/kWh, and 100 MW was awarded to Tata Power Company.

KSEB had subsequently issued the letter of award to Tata Power Company on January 6, 2021.

While the PPA with NTPC has been cleared for 90 MW of solar power at Rs2.97/kWh. 

The PPA with Tata Power Company has taken time as the company intended to execute the PPA through TP Saurya and to do so, the Commission had to clear it.

Since Tata Power Company wanted to be completely absolved from its obligation as a bidder from the date of signing the agreement. However, the commission in its second hearing held on June 8, 2021 said that as Tata Power Company, was the successful bidder, and had agreed to supply 110 MW solar power to KSEB as per the bid. Therefore, it could not be absolved from its obligations under the PPA, which is now to be signed by TP Saurya on behalf of Tata Power Company. 

The Commission asked Tata Power Company to make amendments to the agreement with TP Saurya and submit it for clearance.

Tata Power Company has consequently submitted the amended agreement with a new clause, which stated, “In case of any default or breach on the part of TP Saurya, and failure on the part of TP Saurya to remedy such breach or default even after due notice of the same, then Tata Power Company would discharge the obligations of TP Saurya to the satisfaction of KSEB to the extent and as envisaged under the PPA.”

After considering all the facts, articles, clauses, and other conditions in the PPA between KSEB and Tata Power Company, the Commission has decided to grant permission to KSEB to sign the PPA with TP Saurya. 

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