CERC Approves Tariffs for NTPC's 1000 MW Wind-Solar Hybrid Projects

The Central Electricity Regulatory Commission (CERC) has approved the electricity tariffs discovered through competitive bidding for 1000 MW of wind-solar hybrid power projects connected to the inter-state transmission system (ISTS).

This order follows a petition filed by NTPC Ltd. seeking approval for the tariffs. NTPC initiated the bidding process by issuing a Request for Selection on 15th March 2024 for developing these projects.

The bidding process received an enthusiastic response, with nine bidders participating and offering an aggregate capacity of 2170 MW. After thorough technical and commercial evaluation, eight bids were found compliant with the qualification requirements. The subsequent e-reverse auction held on 26th July 2024 resulted in the selection of five successful bidders, who were issued Letters of Award on 22nd August 2024.

The discovered tariffs through this competitive process ranged between INR 3.43 to INR 3.46 per kWh for different bidders. Juniper Green Energy Pvt. Ltd. emerged as the lowest bidder (L1) with a tariff of INR 3.43 per kWh for 150 MW capacity. Other successful bidders included TEQ Green Power IX Pvt.Ltd. (250 MW at INR 3.45/kWh), JSW Neo Energy Ltd. (300 MW at INR 3.45/kWh), Avaada Energy Pvt. Ltd.(230 MW at INR 3.46/kWh), and Adyant Enersol Pvt. Ltd. (70 MW at INR 3.45/kWh).

While examining the petition, the Commission noted that NTPC had filed it on 4th September 2024, which was beyond the 15-day timeline prescribed in the Hybrid Guidelines from the date of tariff discovery (26th July 2024). However, considering NTPC's explanation regarding the time taken for obtaining necessary approvals and completing internal processes, the Commission decided to condone the delay while emphasising the importance of adhering to stipulated timelines in future cases.

The Evaluation Committee duly certified the transparency and competitiveness of the process. The Commission also verified that the tariff discovery mechanism followed the bucket-filling method as specified in the Guidelines and that the discovered tariffs were reasonable considering market conditions.

Regarding NTPC's request for approval of a trading margin of INR 0.07 per kWh, the Commission referred to the provisions of the CERC (Terms and Conditions of Trading License) Regulations. It was clarified that while Regulation 8(1)(d) permits mutually agreed trading margins for long-term contracts, the margin cannot exceed INR 0.02 per kWh unless the trading licensee provides escrow arrangements or irrevocable, unconditional revolving letters of credit to the generators. The Commission directed that any trading margin beyond INR 0.02 per kWh would require specific mutual agreement between NTPC and the distribution licensees in their Power Sale Agreements.

The Commission approved the adoption of tariffs under Section 63 of the Electricity Act for the entire 1000 MW capacity awarded to the five successful bidders. It was clarified that this adoption is independent of the subsequent signing of Power Purchase Agreements between NTPC and generators or Power Sale Agreements with distribution licensees. However, NTPC was directed to submit copies of all executed PPAs and PSAs once they are finalized and to inform the Commission if any awarded capacity does not materialize into contracts.

This order provides regulatory certainty for the development of 1000 MW of wind-solar hybrid power capacity while ensuring that the tariff discovery process was transparent, competitive, and in compliance with statutory provisions. The Commission's decision balances the interests of renewable energy generators, intermediaries like NTPC, and, ultimately, electricity consumers while promoting the growth of clean energy in the country.