The Central Electricity Regulatory Commission (CERC) has approved the tariffs for NHPC’s 1,400 MW interstate transmission system-connected firm and dispatchable renewable energy (FDRE) projects with energy storage systems.

The approved tariffs are ₹4.55 (~$0.053)/kWh for BN Hybrid Power, ₹4.63 (~$0.054)/kWh for Hero Solar Energy and Solarcraft Power India, and ₹4.64 (~$0.054)/kWh for Juniper Green Energy, Renew Solar Power, and ACME Cleantech Solutions.

Background

The Ministry of Power (MoP) issued guidelines on June 9, 2023, for procuring power from FDRE projects through tariff-based competitive bidding, which allows for the inclusion of energy storage systems.

NHPC, designated as the intermediary procurer and renewable energy implementing agency, issued a request for selection on September 30, 2023, for a capacity of 1,500 MW. In the e-reverse auction on February 22, 2024, a capacity of 1,400 MW was awarded to six developers. Letters of award were issued on March 11, 2024.

However, NHPC missed the original tariff approval petition filing deadline of March 8, 2024. It sought an extension from the Ministry of New and Renewable Energy (MNRE) on May 25, 2024, requesting 60 days from the power sale agreement (PSA) to approach the Commission.

Consent to procure power was received from the New Delhi Municipal Council (NDMC) for 120 MW on June 7, 2024, and from Uttar Pradesh Power Corporation for 1280 MW on October 1, 2024. NHPC signed the PSA with UPPCL on November 27, 2024.

Power purchase agreements (PPAs) with five of the six bidders were signed between December 18 and 27, 2024, while the agreement with BN Hybrid Power remained pending at the time of filing. BN Hybrid Power later filed a reply to an affidavit on March 7, 2025, confirming no objection to the tariff adoption.

NHPC also sought approval to charge a trading margin of ₹0.07 (~$0.00082)/kW.

Commission’s Analysis

The Commission observed that the bidding process was fully compliant with the MoP’s guidelines.

CERC acknowledged that although the petition was filed late, the delay was justified due to the time required to execute the PSAs and PPAs. It also noted that the MNRE amended the guidelines on February 12, 2025, extending the time for filing such petitions to 30 days post-tariff discovery, which offered flexibility to procuring entities.

Despite only 1,280 MW being tied up with UPPCL at the time of the order, the Commission allowed tariff adoption for the full 1,400 MW capacity, considering the pending draft agreement with NDMC for the remaining 120 MW.

The Commission adopted the discovered tariffs and emphasized that NHPC must adhere to specified timelines in future bidding and petition processes.

The Commission conditionally accepted the higher trading margin of ₹0.07 (~$0.00082)/kW. It decided that if NHPC fails to provide payment security mechanisms, such as escrow accounts or letters of credit, the trading margin will be capped at ₹0.02 (~$0.00023)/kWh per its trading license regulations.

Recently, CERC released draft guidelines for virtual power purchase agreements, which could evolve as another instrument to enable designated consumers to meet their renewable energy consumption obligation targets.

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