The Central Electricity Regulatory Commission (CERC) recently approved a tariff of ₹2.41 (~$0.032)/kWh for 1,110 MW of wind-solar hybrid power projects as agreed by the successful bidders.
The Commission also approved the trading margin of ₹0.07 (~$0.0009)/kWh as agreed by the distribution licensees. If the Solar Energy Corporation of India (SECI) failed to provide an escrow arrangement or an unconditional and revolving letter of credit to the solar developers, the trading margin would be reduced to ₹0.02 (~$0.0003)/kWh.
As per the provisions of the ‘Change in Law Rules,’ the generator and the procurer should settle the claim themselves and approach the Commission only for the verification of the compensation amount.
SECI had filed a petition for the adoption of tariff for 1,110 MW of wind-solar hybrid projects (Tranche-III) connected with the interstate transmission system (ISTS) discovered through a competitive bidding process.
SECI invited bids to set up 1,200 MW of ISTS-connected wind-solar hybrid projects (Tranche-III) in January 2020. It received 11 bids for an aggregate capacity of 4,210 MW. In the auction process, ABC Renewable Energy (380 MW), Adani Renewable Energy Holding Eight (600 MW), and AMP Energy Green (130 MW) were declared winners. All three quoted a tariff of ₹2.41 (~$0.032)/kWh.
SECI submitted that all the projects would be completed in the financial year (FY) 2022-23 and would enable the distribution companies (DISCOMs) to meet their renewable purchase obligation (RPO) targets.
It also added that as per the clause of the power purchase agreements (PPAs) and the power sale agreements (PSAs), the change in rates of safeguard duty, goods and services tax (GST), and basic customs duty (BCD) after December 7, 2020, would be considered ‘Change in Law,’ subject to the approval of the Commission at the time of tariff adoption.
SECI added that the nature and extent to which the above events will have an impact would be considered based on the implications on the implementation of the project by the developers.
The Commission observed that SECI had made certain changes in the ‘Change in Law’ provisions in the bidding documents. SECI, in the PPA and the PSA, had provided for a pre-determined amount of compensation for ‘Change in Law’ events, whereby for every net increase or decrease of ₹100,000 (~$1,322)/MW in the project cost, there will be a corresponding increase or decrease of an amount equal to ₹0.0049 (~$0.00006)/kWh.
The modified ‘Change in Law’ provisions had been incorporated in the bidding documents before the bid submission deadline. However, the Commission added that the competent authority had not approved the deviations at the time of their incorporation in the bidding documents.
The Central Commission noted that though the Ministry of New and Renewable Energy (MNRE) approved the changes on March 1, 2021, the petitioner furnished the conformity certificate on February 18, 2021. This implies that on the date the conformity certificate was issued, there was no approval from the MNRE, which was a serious lapse by SECI.
The central regulator said that the parties had agreed that any change in the rates of safeguard duty, GST, and basic customs duty after December 7, 2020, would be treated as ‘Change in Law.’
In a recent order, CERC approved tariffs of ₹2.99 (~$0.039)/kWh for 160 MW and ₹3 (~$0.040)/kWh for 810 MW of wind power projects (blended with solar).
Earlier, CERC had approved a tariff of ₹2.69 (~$0.036)/kWh discovered by SECI for 600 MW of wind-solar hybrid projects (Tranche II) under the ISTS program.
Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.