Acme Solar, one of India's fastest growing companies in the solar energy sector, has refused to work on a 600 MW project of the NTPC. Acme Solar has told NTPC that the agreement is no longer feasible as the Telangana government did not give regulatory approvals within two months of signing the power purchase agreement (PPA).
The solar developer had quoted a tariff of Rs 2.59 per unit to win the project in an auction. In the PPA, the trading margin and the power capacity had to be approved by the Telangana State Regulatory Commission (TSERC).
Acme has now asked NTPC to return its bank guarantee within three days, reported Economic Times. NTPC, on the other hand, has asked for an extension that was denied by Acme stating terms of uncertainty in the project and questioning the commercial feasibility and financial viability of the project if it is taken forward.
NTPC has decided to reduce the tariff by 31 paise from the allotted tariff of Rs 2.59 per unit if Acme denies the imposition of the safeguard duty. Safeguard duty of 26 per cent was imposed by the Director-General of Trade Remedies in July last year between the bid submission for the NTPC auction and the holding of the actual reverse auction.
Acme has disagreed with the imposition stating that it is not permissible by law to impose new conditions after the bidding process is completed.