The Assam Electricity Regulatory Commission (AERC) has directed the Assam Power Distribution Company (APDCL) to procure solar power at tariffs lower than ₹3.92 (~$0.046)/kWh.

Background

The petitioner, APDCL, floated a tender to develop 15 MW ground-mounted solar power projects on a build-own-operate model.

The tender was published with a ceiling tariff of ₹3.33 (~$0.039)/kWh.

After failing to attract any bidders, the ceiling tariff was raised to ₹3.6 (~$0.042)/kWh. However, the petitioner was still unable to attract bidders and planned to increase the tariff further.

The bidders asked for a higher tariff, citing several challenges with the project, such as lower global horizontal irradiance in northeastern states, lower project capacity, and difficult terrain.

They also added that the project land was vulnerable to water inflows, and a detailed assessment of the availability of feasible land areas was not completed.

With no interest from bidders, the petitioner approached the Commission to raise the ceiling tariff to ₹3.92 (~$0.046)/kWh for the 15 MW solar projects to make the tender more attractive.

The petitioner highlighted the Commission’s earlier awards to two projects of 50 MW and 70 MW at Borsola and Bilasipura at a tariff of ₹3.92 (~$0.046)/kWh. It used these tariff awards as a precedent for approving its tariff request.

Commission’s Analysis

The Commission observed that APDCL awarded the 50 MW and 70 MW projects at a tariff of ₹3.92 (~$0.046)/kWh, which includes the land costs.

It added that a tariff of ₹3.92 (~$0.046)/kWh for 15 MW solar projects without the land cost will be higher and adversely impact the end consumers.

The Commission also noted that other states generate solar power at lower costs than the petitioner’s solar power generation expenses.

It rejected APDCL’s request to procure solar power at the proposed tariff of ₹3.92 (~$0.046)/kWh and directed the petitioner to procure solar power from other projects at lower tariffs.

In October 2024, the AERC released the draft of the Assam Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters) Regulations, 2024.

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