CERC Approves a Tariff of ₹2.69_kWh for Adani’s 600 MW of ISTS Solar-Wind Hybrid Projects

The Central Electricity Regulatory Commission (CERC) has approved a tariff of ₹2.69 (~$0.036)/kWh discovered by the Solar Energy Corporation of India (SECI) for 600 MW of wind-solar hybrid projects (Tranche II) under the interstate transmission system (ISTS) program.

The Commission added that SECI had carried out the bidding process transparently. The trading margin of ₹0.07 (~$0.0009)/kWh will be mutually agreed upon by the contracting parties. The Commission has asked the parties to comply with the provisions of the payment security mechanism.

Background

SECI had filed a petition for the adoption of tariff discovered through competitive bidding for 600 MW wind-solar hybrid projects under Tranche II of the ISTS program. It added that the bidders were selected through a transparent bidding process and as per the guidelines laid down by the Ministry of New and Renewable Energy (MNRE) for setting up of 2,500 MW of ISTS connected wind-solar hybrid projects.


SECI was designated as the nodal agency for the implementation of the project. It was mandated to invite bids for the project and enter into power purchase agreements (PPAs) and power sale agreements (PSAs) with the distribution licensees.

SECI had invited bids for the setting up of 1,200 MW of ISTS connected wind-solar hybrid power projects (Tranche II) in March 2019. The projects were scheduled to be commissioned in 2021-22. These projects would also help the distribution licensees in meeting their renewable purchase obligation (RPO) targets.

The tender was undersubscribed, and bids received were only for 900 MW against the tendered capacity of 1,200 MW. The e-reverse auction was carried out on May 27, 2019, and Adani Renewable Energy Park (Gujarat) Limited (AREPGL) was declared as the successful bidder in the auction quoting a tariff of ₹2.69/kWh for a capacity of 600 MW. The projects are slated to be developed in Rajasthan.

SECI had agreed to sell the entire 600 MW to distribution licensees at the discovered rate of ₹2.69 (~$0.036)/kWh with a trading margin of ₹0.07 (~$0.0009)/kWh upon the commissioning of these projects.

Based on the request of the distribution licensees, 500 MW was allocated to Punjab State Power Corporation Limited (PSPCL), and 100 MW was allocated to India Power Corporation Limited (IPCL). Later, SECI entered into PSAs with these licensees and a PPA with the special purpose vehicle of Adani Green Energy Nine Limited (AGEL).

The Commission approved the tariff and asked the contracting parties to agree on the trading margin for long-term transactions mutually. The Commission also directed SECI to take into account regulation 8(1)(f) of the Trading License Regulations, which states:

“For transactions under back to back contracts, where escrow arrangement or irrevocable, unconditional and revolving letter of credit as specified in clause (10) of regulation 9 is not provided by the trading licensee in favor of the seller, the trading licensee should not charge trading margin exceeding two ₹0.02 (~$0.0003) /kWh.” 

According to Mercom’s India Solar Project Tracker, SECI has tendered 3.6 GW capacity of solar-wind hybrid projects under the ISTS program (Tranche I to Tranche III) and auctioned 1.56 GW capacity of projects under Tranche I & II.

Recently, SECI extended the deadline for the submission of bids to set up 1.2 GW of wind-solar hybrid power projects in the country under Tranche III of the ISTS program. The projects involve the setting up of wind-solar hybrid power projects on a build-own-operate (BOO) basis and selling the hybrid power to SECI.