Despite MERC Order, Will Myrah Energy Execute 100 MW Project in Time?

If you ever needed to see the long journey and pitfalls a developer has to travel between bidding and actually completing a renewable project in India, then the case of Mytra Energy subsidiary Mytrah Vayu (Vedavati) Private Limited (MVEL) versus the Maharashtra State Electricity Distribution Co. Ltd.

(MSEDCL) and Maharashtra State Electricity Transmission Co. Ltd MSETCL) is instructive. The case over a 100 MW wind energy project was recently decided at the MERC on January 16 this month.

After the battle at the MERC (Maharashtra Electricity Regulatory commission), where MVEL had effectively pleaded for an extension in time allowed for commissioning by invoking the force majeure clause, besides compensation as well as a higher rate, the final order, while trying to do a balancing act for the firm, may not actually help it go over the line as far as project profitability goes.

The issue of PBG (Performance Bank Guarantee), which MVEL had sought to prevent MSEDCL from invoking, has also been extended, not extinguished, by asking MVEL to submit a fresh guarantee, besides the primary MERC order that gives it a further extension in time till 27th June, 2020, from the earlier 16th Jan, 2020 for completion. So what will keep Mytrah worried despite the order that gave it both extra time and saved its PBG, for now?

Two things. For one, it has failed to get any compensation from the commission for the delays caused by MSEDCL due to delay in providing grid connectivity (GC) permission, as that was not explicitly stated as an option for force majeure. By refusing its plea to be allowed to exit the project, Mytrah finds itself fighting the clock yet again to have the 100 MW project up and running by June 2020.

In the new SCOD (Scheduled commercial operation date) , the only saving grace for Mytrah might be the fact that the GC is in place for now, and it will beat the impact of the monsoons, if all goes to plan.

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