CERC Approves Tariff for 1200 MW Solar Project with 600 MW/1200 MWh Energy Storage

The Central Electricity Regulatory Commission (CERC) has approved the tariff structure for the SECI-ISTS-XV project, a 1200 MW Inter-State Transmission System (ISTS)-connected solar photovoltaic (PV) power project, integrated with 600 MW/1200 MWh energy storage.

The ruling follows a petition submitted by the Solar Energy Corporation of India Ltd. (SECI), the central agency responsible for driving renewable energy implementation. SECI's petition sought the CERC's validation of tariffs discovered through a meticulously conducted competitive bidding process, aligning with the Ministry of Power's established guidelines. 

SECI's issued a Request for Selection (RfS) with thorough technical and financial evaluations, and an e-reverse auction. Despite navigating through several corrigendums and amendments to the RfS, the process successfully identified four winning bidders: Pace Digitek Infra Pvt.Ltd., Hero Solar Energy Pvt.Ltd., ACME Solar Holdings Ltd., and JSW Neo Energy Ltd.. Notably, the Kerala State Electricity Board Ltd. (KSEBL), a crucial entity in purchasing the generated power, was actively involved as a respondent in the petition. This comprehensive approach ensured that all stakeholders had an opportunity to participate and that the final selection was based on competitive and transparent criteria.

The CERC, after a detailed examination of SECI's submissions and the bidding process, including the validation of conformity certificates affirming adherence to regulatory guidelines, has decided to adopt the discovered tariffs. However, this adoption is contingent upon SECI finalising Power Purchase Agreements (PPAs) and Power Sale Agreements (PSAs) for the entire 1200 MW capacity. Currently, only 500 MW has been secured through these agreements.

The CERC has directed SECI to provide copies of the remaining agreements upon execution and to furnish detailed explanations if agreements for the remaining capacity are not concluded. The Commission stated, "In the present case, out of the total awarded capacity of 1200 MW, the Petitioner has so far tied up only 500 MW under the PPAs and PSA. However, keeping in view the overall emphasis of the Guidelines on the expeditious adoption of the tariff, we consider it appropriate to proceed with the adoption of the tariff without waiting tying up of the entire awarded capacity under the PPAs and PSAs, Order in Petition No. 283/AT/2024 Page 17 albeit such adoption shall be subject to the Petitioner tying up the balance awarded capacity under the PPAs and PSAs."

It further added, "Therefore, in terms of Section 63 of the Act, the Commission adopts the individual tariff for the Solar Power Projects with ESS (Tranche XV), as agreed to by the following successful bidders, subject to the Petitioner tying up the balance awarded capacity under the PPAs and PSAs."

Additionally, the CERC addressed SECI's request for a trading margin of INR 0.07/kWh. While acknowledging the provision for mutually agreed margins in long-term contracts under the Central Electricity Regulatory Commission (Trading Licence) Regulations, 2020, the CERC emphasised that the approved margin is subject to SECI providing adequate financial security to the solar generators, specifically through an escrow arrangement or an irrevocable, unconditional, and revolving letter of credit, and that in the absence of such security, the margin is limited to INR 0.02/kWh.

This ruling by the CERC underscores the critical importance of transparency, regulatory compliance, and financial security in the procurement of renewable energy. The decision to approve the tariffs, subject to the full capacity tie-up, reflects the commission's commitment to accelerating renewable energy projects while ensuring adherence to regulatory standards and safeguarding the interests of all stakeholders.