The Central Electricity Regulatory Commission (CERC) has adopted a tariff of ₹2.43 (~$0.02)/kWh for 400 MW grid-connected solar power projects to be developed by O2 Power at Kalijal and Matuon ki Dhani village in Barmer district and Rawadi Chak village in Jaisalmer district in Rajasthan.

NTPC had filed a petition to adopt a tariff discovered through a competitive bidding process for the procurement of power for 400 MW.

Background 

NTPC issued the request for selection in February 2020 to set up grid-connected solar power projects with an aggregate capacity of 1,200 MW in India. The final tariff discovered after the e-reverse auction in August 2020 was ₹2.43 (~$0.02)/kWh for 200 MW capacity.

The Letter of Award (LoA) was issued to the successful bidder — O2 Power SG, a special purpose vehicle (SPV) of O2 Power, on April 19, 2022.

Subsequently, NTPC entered into a power purchase agreement (PPA) with its project company – Xl Xergi Power, on July 14, 2022, for 200 MW on the basis of the signed power sale agreement (PSA) with GRIDCO on April 18, 2022, for such capacity.

As per the PSA, NTPC was entitled to a tariff of ₹2.50 (~$0.03)/kWh (inclusive of a mutually agreed trading margin of ₹0.07 (~$0.00085)/kWh) to be paid by GRIDCO.

NTPC requested the adoption of the tariff of ₹2.43 (~$0.02)/kWh, which was discovered through a competitive bidding process. It also said that since there was no other beneficiary besides GRIDCO, LoA only for 200 MW was awarded, and PSA was signed.

However, an additional PSA for a capacity of 200 MW was also executed between NTPC and GRIDCO on September 30, 2022, after the OERC’s approval.

Following this, NTPC issued another LoA for an additional 200 MW on October 11, 2022, and thereafter entered into an additional PPA on November 24, 2022.

The total tied-up capacity now stood at 400 MW as NTPC could not identify buyers and distribution licensees beyond this capacity.

Commissions Analysis 

The Commission said that the PPA outlines the agreement between the parties on the pre-determined quantum of compensation for “Change in Law” events, while the clause provides that only the appropriate commission shall determine such agreement.

NTPC has submitted that in addition to the tariff, there will be a trading margin of ₹0.07 (~$0.00085)/kWh to be recovered from the distribution licensees in terms of PSA.

In case of failure by NTPC to provide escrow arrangement or irrevocable, unconditional, and revolving letter of credit to the wind generators, the trading margin shall be limited to ₹0.02 (~$0.00024)/kWh as specified in the Trading Licence Regulations.

The Commission thereafter adopted the requested tariff as agreed to by the successful bidder subject to the approval of the deviation in the bid documents per the provisions, which will remain valid throughout the period covered in the PPAs and PSAs.

Recently CERC granted a trading license to Vibrant Energy Holdings Global India (VEH Global India) for interstate electricity trading across India.

Earlier in the same month, ruling in favor of a solar developer, CERC directed the Madhya Pradesh Power Management Company (MPPMCL) and Delhi Metro Rail Corporation (DMRC) to settle the balance of goods and service tax (GST) claims along with the payment of late payment surcharge.