This year, Azure Power signed the latest solar contract in a string of characters and secured government support for a major ISTS (Interstate Transmission) project. On Thursday, the developer said it was chosen by the Solar Energy Corporation of India (SECI) to use 2GW solar throughout the country, with the support of an electricity purchase contract (PPA). India Ratings has examined the fine print in several power purchase agreements (PPAs) signed between renewable energy developers and NTPC and SECI. They found that while AAEs emphasize that payment obligations are direct obligations, all other risks and obligations would be based on the changeover to the euro. The emphasis on SECI and NTPC being only intermediaries and associating signed PPPs with a developer with a “Power Sale Agreement” (PSA) signed with a particular distribution company (whose name is listed in AAE) indicates a tendency to limit debts to seci and NTPC. Indeed, the newer tariffs, signed in 2019 by both SECI and NTPC, go even further when it comes to limiting their own exposure in the event of a failure on the part of the discoms. Since the abolition of the AAE with Adani, SECI has also withdrawn the clause from some other tenders for renewable energy. J.N. Swain, managing director of SECI, told Reuters on Wednesday that potential electricity buyers had been consulted and that “due lawsuits” had been followed during the auction and before the agreement with Adani was signed.
However, the details of the agreement between Adani Green and Solar Energy Corp of India Ltd (SECI) that have not been disclosed to date show that if SECI does not find a buyer, the Agency has no “legal or financial obligation” to support the project. This would be the first major SECI project in the absence of a government-guaranteed power purchase contract (AAE), which analysts said was the key to the development of India`s renewable energy sector. Gautam Adani stated that the most recent project could make a profit with the electricity price of 2.92 rupees (US$0.0393) per kilowatt hour (kwh) agreed in the SECI tender. “With 2.92 rupees, there is enough room for manoeuvre and we also have 3-5 years to implement this project,” he said in June. Adani Green said 2 GW of production capacity would arrive on the river by 2022, while the rest will be added in annual stages of 2GW until 2025 as part of the agreement. There are no buyers vying for the project yet and it is not clear when SECI will be able to find buyers, a process that usually takes months. Adani Green Energy`s record $6 billion solar project, announced in June, has no guaranteed customer, as evidenced by its agreement with India`s leading solar adoption agency and could expose the company to higher financial risk. Shares in the company controlled by billionaire Gautam Adani have tripled since the signing of the 8 gigawatt multi-plan (GW) agreement, which Adani called “the greatest of its kind ever” and a milestone for India.