CERC Approves 1,200 MW Solar Tariffs Under SJVN’s Auction

The Central Electricity Regulatory Commission (CERC) has approved tariffs for 1,200 MW of ISTS-connected solar power projects following a petition by SJVN Ltd. for the adoption of tariffs discovered through the Solar-2 competitive bidding process conducted nationwide.

It may be mentioned that SJVN Ltd, designated as the Renewable Energy Implementing Agency (REIA), initiated the bidding process on April 30, 2024, inviting proposals for setting up solar projects anywhere in the country.

The tender received a strong response, attracting 12 bidders who collectively proposed 3,990 MW, more than three times the offered capacity.

After thorough technical evaluations and an e-reverse auction conducted on August 8, 2024, five developers secured contracts. ACME Solar Holdings, Essar Renewables, and SAEL Industries each won 300 MW, while NTPC Renewable Energy secured 200 MW and Onward Solar Private Limited was awarded 100 MW.

The discovered tariffs were highly competitive, with four bidders quoting INR 2.52 per kWh and NTPC Renewable Energy marginally higher at INR 2.53 per kWh. The Commission acknowledged that the tariffs were arrived at through a transparent and fair auction process, in line with the Ministry of Power’s Solar Bidding Guidelines issued on July 28, 2023.

However, while approving the tariffs, CERC expressed dissatisfaction with SJVN’s failure to submit a mandatory conformity certificate from the Bid Evaluation Committee. The Commission issued a directive emphasising that such procedural lapses must be avoided in future tenders.

In addition to tariff approval, CERC reviewed SJVN’s request for a trading margin of INR 0.07 per kWh. While recognising the contractual freedom granted under Trading License Regulations, the Commission ruled that unless SJVN establishes adequate payment security mechanisms, such as escrow accounts or irrevocable letters of credit, the trading margin would be capped at INR 0.02 per kWh. This decision underscores the regulator’s insistence on financial safeguards to ensure smooth power transactions.

A key aspect of the approved projects is their inclusion in India’s Uniform Renewable Energy Tariff (URET) mechanism, which has been operational since February 15, 2024.

Implemented through Grid-India, URET ensures that power procurers pay a standardised tariff regardless of which solar project supplies electricity. This mechanism is designed to reduce price fluctuations and provide greater financial predictability for buyers and sellers in the renewable energy market.

Further, CERC has directed SJVN to submit copies of finalised Power Purchase Agreements (PPAs) with developers and Power Sale Agreements (PSAs) with distribution companies once they are executed.

Additionally, the Commission has reserved the right to review the case if the awarded capacity is not fully tied up under contracts. The selected projects are expected to commence power supply within 24 months of signing the PPAs.