In a first, the Appellate Tribunal of Electricity has granted solar power generators in Tamil Nadu, deemed generation compensation for arbitrary back down and curtailment based on the tariff set out in the power purchase agreement, even though there was no underlying provision providing for such compensation.

Introduction

In a recent landmark decision, the Appellate Tribunal of Electricity (APTEL) has granted deemed generation compensation to the solar power generators (SPGs) in Tamil Nadu for arbitrary back down and curtailment by Tamil Nadu Generation and Distribution Corporation (TANGEDCO) and the Tamil Nadu State Load Despatch Centre (TNSLDC). The order dated 2 August 2021 (APTEL Order) is unique, as the APTEL has held that deemed generation compensation is to be calculated basis the tariff set out in the power purchase agreement (PPA), even when an underlying provision providing for such compensation is absent in the PPA.

Background

Owing to arbitrary curtailment of power by TANGEDCO and the TNSLDC, the National Solar Energy Federation of India (NSEFI) on 10 August 2016 filed a petition before the Tamil Nadu Electricity Regulatory Commission (TNERC), seeking directions to be issued to TANGEDCO, TNSLDC, Tamil Nadu Transmission Corporation Limited (TANTRANSCO) and the Ministry of New and Renewable Energy, Government of India (Respondents) to observe the 'Must Run' status of solar power plants and to pay deemed generation charges to the SPGs for the capacity that the SPGs could not generate and supply due to the frequent backing down instructions.

To read the full article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.