Solar Energy Corporation of India Ltd. (SECI) vs. Wind Four Renergy Pvt. Ltd. [February 27, 2024]
This Supreme Court case centered on delays in the commissioning of a 250 MW wind power project. Wind Four Renergy Pvt. Ltd. (WFRPL) entered into five Power Purchase Agreements (PPAs) with Power Trading Company India Ltd. (PTC) to supply wind energy, with SECI acting as the implementing agency. The project’s Scheduled Commercial Operation Date (SCOD) was set for October 4, 2018, 18 months from the Letter of Award. However, the project was delayed due to the Power Grid Corporation of India’s failure to operationalize Long-Term Access (LTA) for inter-state transmission, which was only completed on April 14, 2019.
The Ministry of New and Renewable Energy (MNRE) granted a 60-day extension after LTA operationalization, and SECI accepted a new commissioning deadline of June 13, 2019. WFRPL, claiming it was not informed of LTA operationalization until November 22, 2019, sought further extensions. The Central Electricity Regulatory Commission (CERC) granted an additional 132-day extension, which SECI accepted. However, WFRPL appealed to the Appellate Tribunal for Electricity (APTEL), which directed that the 132-day extension should run from January 11, 2022—the date of its own order—rather than from the operationalization of LTA.
Legal Issues
Whether the 132-day extension for project commissioning should run from the date of LTA operationalization or from the date of the APTEL order.
The significance of adhering to strict project timelines in renewable energy contracts.
Supreme Court’s Analysis
The Supreme Court found APTEL’s direction to start the 132-day extension from the date of its own order “irrational” and contrary to the scheme of the PPA and the regulatory framework. The Court emphasized that the purpose of strict timelines in renewable energy projects is to ensure the early supply of green energy and reduction of carbon footprint, especially as tariffs for green energy have declined substantially in recent years.
The Court noted that once WFRPL was aware that LTA was functional and had already been granted a 60-day extension (by letter dated October 22, 2019) and a further 132 days (by CERC order), there was no justification for the extension to commence from the date of the APTEL order. The Supreme Court restored the CERC’s original order and set aside APTEL’s directions.
Judgment
The Supreme Court allowed SECI’s appeal, set aside APTEL’s order, and restored the CERC’s decision.
The Court directed that SECI was entitled to recover the ₹10 crores refunded to WFRPL pursuant to the impugned order, with 12% simple interest per annum.
The decision reinforced the need for strict adherence to project timelines in the renewable energy sector to meet national policy objectives.
Significance
The ruling clarifies that regulatory and contractual timelines in renewable energy projects must be strictly enforced to promote early supply and environmental goals.
The judgment discourages judicial or regulatory interventions that undermine the commercial certainty and policy objectives of green energy projects.
It establishes that extensions for project delays must be grounded in the actual facts and contract terms, not in subsequent judicial or quasi-judicial orders.
Citation:
Solar Energy Corporation of India Ltd. (SECI) v. Wind Four Renergy Pvt. Ltd. & Ors., Supreme Court, Civil Appeal No. 2451 of 2022, Judgment dated February 27, 2024 (Neutral Citation: 2024 INSC 160).
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