The Central Electricity Regulatory Commission (CERC) has approved a final levelized tariff of ₹2.68 (~$0.031)/kWh for NTPC’s 92 MW floating solar projects at Rajiv Gandhi Combined Cycle Power Project (RGCCPP) in Kayamkulam, Kerala.

Background

On May 11, 2018, NTPC signed a memorandum of understanding with the Kerala State Electricity Board (KSEBL) for developing renewable power projects.

It commenced bidding for engineering, procurement, and construction (EPC) contracts for two phases of 92 MW floating solar projects at the RGCCPP in Kayamkulam.

NTPC signed a draft power purchase agreement (PPA) with KSEBL, proposing a tariff based on the EPC costs discovered through competitive bidding. This draft PPA stipulated a tariff of ₹3.16 (~$0.037)/kWh payable by KSEBL for energy supplied up to 28% capacity utilization factor (CUF). The tariff was contingent upon the Kerala State Electricity Regulatory Commission’s (KSERC) approval.

KSERC held that the applicable tariff would be the lower value between the tariff determined by CERC and the mutually agreed tariff of ₹3.16 (~$0.037)/kWh between KSEBL and NTPC. CERC initially determined an interim tariff of ₹2.94 (~$0.034)/kWh for the project.

The project’s 22 MW and 70 MW phases were delayed by approximately 19 and 13 months, respectively.

It achieved its commercial operation date (COD) on June 24, 2022.

This development led to petitions to CERC filed by KSEBL requesting a review of the provisional tariff and the final tariff’s determination and NTPC seeking approval of the revised levelized tariff and recovery of various costs caused by the project’s COD delays.

Commission’s Analysis

CERC reiterated that the final tariff would be lower than ₹3.16 (~$0.037)/kWh or the approved tariff.

It approved the final levelized tariff of ₹2.68 (~$0.031)/kWh for the solar projects.

The approved tariff is lower than NTPC’s claimed amount of ₹3.22 (~$0.038)/kWh and lower than the previously determined interim tariff of ₹2.94 (~$0.034)/kWh.

Additionally, the Commission directed NTPC to issue bills for the energy generated from the Kayamkulam project based on the finalized tariff for the full 25-year PPA period.

The Commission also acknowledged that NTPC and KSEBL recognized that force majeure events caused the COD delays. It concluded that NTPC was entitled to an interest during the construction of ₹128.1 million (~$1.47 million) and an incidental expenditure during the construction of ₹44.8 million (~$516,904) for the delays.

The Commission approved a capital cost of ₹4.57 billion (~$54.87 million). However, it dismissed NTPC’s additional cost claim for a 7 km motorable road, as it was not constructed.

Recently, CERC approved tariffs ranging from ₹3.43 (~$0.04)/kWh to ₹3.46 (~$0.04)/kWh for NTPC’s 1 GW interstate transmission system-connected wind-solar hybrid power projects.

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