Tata Power’s 150MW Maharashtra Solar Project Gets Safeguard Duty Relief From MERC

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Tata Power Renewable Energy Ltd. had filed a petition on 13 November 2020 seeking the imposition of Safeguard Duty (SGD) for the period of 30 July 2020 to 29 July 2021 on the import of solar cells as an event of ‘Change in Law’.

Tata Power Company Ltd. – Distribution had initiated a competitive bidding process
(followed by reverse auction) for procurement of up to 150 MW power from Solar Power
Projects, for supply of solar power for 25 years via Request for Selection (RfS) on 21 August 2019.

TPREL was selected as the successful bidder for developing the Solar PV Project pursuant
to Letter of Award (LoA) dated 31 October 2019 which was issued in favor of TPREL
for developing Solar PV Project located at Village: Chhayan, Taluka: Pokhran, District:
Jaisalmer, State: Rajasthan. As per the terms of the LoA, TPREL was required to execute
Power Purchase Agreement (PPA) with TPCD.

Tata Power Renewable Energy Ltd (TPREL) is producring solar PV modules from Lianyungangshenzhou New Energy Company Ltd. (LNECL), a company situated in China and a module supply agreement was entered into with LNECL on 28 July 2020 (Supply Agreement).

TPREL, in view of the Old Notification providing the sunset date of 29 July 2020 for imposition of SGD had planned the procurement of solar PV modules with the bonafide belief based upon the said Notification that the SGD would not be applicable on the import of solar PV modules given the sunset clause.

MoF vide New Notification 29 July 2020 extended the applicability of the
safeguard duty for the period of 30 July 2020 to 29 July 2021 at the following rates:
i. fourteen point nine per cent ad valorem minus anti-dumping duty payable, if
any, when imported during the period from 30 July 2020 to 29 January 2021
(both days inclusive); and
ii. fourteen point five per cent ad valorem minus anti-dumping duty payable, if
any, when imported during the period from 30 January 2021 to 29 July 2021
(both days inclusive).

MERC ruled that the project qualified for a Change in Law event for the Ministry of Finance’s notification dated 29 July 2020 extending the imposition of Safeguard Duty.

The additional expenditure and another consequential impact shall be considered on an actual basis for reimbursement under Change in Law after Tata Power Renewable Energy Ltd. files its Petition with all the details in accordance with the provisions of the Power Purchase Agreement.

TPREL had entered into a PPA with TPCD for supply of 150 MW solar power at a tariff of Rs. 2.83/kWh generated from the Solar PV Project.

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