CERC Approves Tariff for 900 MW Solar Projects by SECI

The Central Electricity Regulatory Commission (CERC) has approved the adoption of tariffs for a total of 900 MW solar power projects under Tranche-XI, connected to the Inter-State Transmission System (ISTS).

This decision follows a competitive bidding process and was made in response to a petition filed by the Solar Energy Corporation of India (SECI).

The background to this petition involves SECI's request for tariff adoption for 900 MW of solar capacity, which was selected through a competitive bidding process.Following the issuance of Letters of Award to six successful bidders—SAEL Industries Ltd., Shiva India Corporation Ltd., Jackson Ltd., ReNew Solar, Avaada Energy, and ReNew Solar Power—SECI has signed Power Purchase Agreements (PPAs) for 200 MW with NDMC and Power Sale Agreements (PSAs) with Adani Electricity Mumbai Ltd. (AEML) and AEML Seepz Ltd. for 50 MW each. Additionally, a discrepancy in Schedule B of the PSA was identified and corrected through mutual agreement.

Under Section 63 of the Electricity Act, 2003, CERC is required to adopt tariffs that result from a transparent competitive bidding process. Earlier, the Commission had already approved tariffs for 600 MW of the total 2000 MW under Tranche-XI, confirming the fairness and transparency of the bidding process. SECI was allowed to approach the Commission for the remaining 1400 MW once PPAs and PSAs were finalized. Subsequently, SECI requested tariff adoption for 500 MW, which was granted in a separate petition.

Currently, SECI has tied up 300 MW of the remaining 900 MW through PPAs and PSAs. They sought tariff adoption for this 300 MW, as well as for the remaining 600 MW. While the Commission typically adopts tariffs only for capacities tied up under PPAs and PSAs, it has decided to adopt the tariff for all 900 MW, including the untied 600 MW, due to the transparency of the bidding process and the need for expedience. This approach marks a more flexible stance in tariff adoption.

The Commission said, "In the present case, out of the balance capacity of 900 MW, the Petitioner has so far tied up only 300 MW under the PPA and PSA. However, given the emphasis on expeditious tariff adoption in recent times, the Commission has adopted the tariff without waiting for the tying up of the entire awarded capacity under the PPAs and PSAs. Therefore, in the present case, we consider it appropriate to proceed with the adoption of the tariff for the balance 600 MW capacity also without waiting for the tying up of the capacity under the PPAs and PSAs, albeit such adoption shall be subject to the Petitioner tying up the balance 600 MW capacity under the PPAs and PSAs. Therefore, in terms of Section 63 of the Act, the Commission adopts the individual tariff for the balance 600 MW capacity also as under, subject to the Petitioner tying up the balance awarded capacity under the PPAs and PSAs."

As part of this decision, CERC has also approved a trading margin of INR 0.07/kWh to be paid by distribution companies or purchasing entities under the Power Sale Agreements (PSA). The trading margin applies to SECI’s solar projects, with distribution licensees such as New Delhi Municipal Council (NDMC), Adani Electricity, and AEML Seepz. However, if SECI fails to meet the necessary financial guarantees, the trading margin will be reduced to INR 0.02/kWh.