CERC Clears Rs.2.60/kWh Tariff for SECI's Solar Projects

19 Feb 2024 CW Team

SECI initiated proceedings under Section 63 of the Electricity Act, 2003, seeking the adoption of tariff for their 600 MW solar power projects, labeled as Tranche-XI, interconnected to the Inter-State Transmission System (ISTS) and selected through a competitive bidding process.

Respondents in the case included SAEL Industries, SAEL Solar MHP1, SAEL Solar MHP2, and Gujarat Urja Vikas Nigam (GUVNL).

SECI's petition also encompassed the approval of a trading margin of ?0.07 (~$0.0084) per kWh, a component that was mutually agreed upon by distribution companies (DISCOMs).

Highlighting the bidding process, SECI revealed that a tender was released on March 31, 2023, alongside a draft power purchase agreement (PPA) and power supply agreement (PSA) for selecting 2,000 MW ISTS-connected solar power projects under Tranche-XI. This led to the selection of six bidders for the entire capacity, with SAEL solar MHP1, SAEL solar MHP2, and GUVNL securing contracts for 600 MW each at ?2.60 (~$0.03)/kWh.

The slated commissioning date for these projects is June 30, 2025. To benefit from a 25-year waiver of ISTS charges, projects must declare commercial operation by this date.

The Commission, after thorough analysis, concluded that the tariff adoption was justified given the transparent and competitive nature of the bidding process, adhering to Ministry of Power guidelines. Consequently, the approved tariffs remain valid throughout the respective periods of the executed PPAs and PSAs.

GUVNL and SAEL Industries expressed no objections to the Commission?s decision.

This move by CERC sets a precedent for transparent bidding processes and tariff approvals in the renewable energy sector. Recently, the Commission's decision regarding the delay in adopting tariff orders by the Uttar Pradesh Power Corporation has highlighted the importance of timely regulatory actions in facilitating renewable energy projects.

The Central Electricity Regulatory Commission (CERC) has given its stamp of approval for a tariff of ?2.60 (~$0.03) per kilowatt-hour (kWh) for a combined capacity of 600 megawatts (MW) from solar power projects spearheaded by the Solar Energy Corporation of India Limited (SECI). Additionally, the Commission has endorsed a trading margin of ?0.07 ($0.00084) per kWh. SECI initiated proceedings under Section 63 of the Electricity Act, 2003, seeking the adoption of tariff for their 600 MW solar power projects, labeled as Tranche-XI, interconnected to the Inter-State Transmission System (ISTS) and selected through a competitive bidding process. Respondents in the case included SAEL Industries, SAEL Solar MHP1, SAEL Solar MHP2, and Gujarat Urja Vikas Nigam (GUVNL). SECI's petition also encompassed the approval of a trading margin of ?0.07 (~$0.0084) per kWh, a component that was mutually agreed upon by distribution companies (DISCOMs). Highlighting the bidding process, SECI revealed that a tender was released on March 31, 2023, alongside a draft power purchase agreement (PPA) and power supply agreement (PSA) for selecting 2,000 MW ISTS-connected solar power projects under Tranche-XI. This led to the selection of six bidders for the entire capacity, with SAEL solar MHP1, SAEL solar MHP2, and GUVNL securing contracts for 600 MW each at ?2.60 (~$0.03)/kWh. The slated commissioning date for these projects is June 30, 2025. To benefit from a 25-year waiver of ISTS charges, projects must declare commercial operation by this date. The Commission, after thorough analysis, concluded that the tariff adoption was justified given the transparent and competitive nature of the bidding process, adhering to Ministry of Power guidelines. Consequently, the approved tariffs remain valid throughout the respective periods of the executed PPAs and PSAs. GUVNL and SAEL Industries expressed no objections to the Commission?s decision. This move by CERC sets a precedent for transparent bidding processes and tariff approvals in the renewable energy sector. Recently, the Commission's decision regarding the delay in adopting tariff orders by the Uttar Pradesh Power Corporation has highlighted the importance of timely regulatory actions in facilitating renewable energy projects.

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