The Central Electricity Regulatory Commission (CERC) has approved tariffs of ₹3.41 (~$0.036)/kWh and ₹3.42 (~$0.037)/kWh for NHPC’s 1.2 GW of interstate transmission system (ISTS)-connected wind-solar hybrid power projects with a greenshoe option.

It also approved the power purchase agreements (PPAs) and clarified that the trading margin and implementation structure would ensure alignment with the Ministry of Power guidelines.

Background

NHPC approached the Commission as an intermediary procurer and implementing agency for ISTS projects.

The company stated that the discovered tariffs for the 1.2 GW of ISTS-connected wind-solar hybrid projects were determined through a transparent, tariff-based competitive bidding process. It also requested the Commission to adopt a trading margin of ₹0.07 (~$0.0007)/kWh, to be recovered from buying distribution companies (DISCOMs) under the power sale agreement to be signed between NHPC and the DISCOMs.

NHPC floated the tender in December 2024. The e-reverse auction was held in March 2025.

Adani Renewable Energy Holding Twelve, Sprng Vayu Vidyut, Illuminate Hybren, and Avaada Energy were declared winners, respectively. Adani Renewable Energy Holding Twelve and Avaada Energy were awarded an additional 600 MW each under the greenshoe option.

NHPC also furnished a brief comparison of the tariffs discovered in tenders issued by other implementing agencies for similar projects and reiterated that the tariff discovered in the present case was aligned with prevailing market tenders.

Several stakeholders raised concerns regarding the discovered tariff levels, the applicability and quantum of the trading margin, and the risk allocation and contractual structure.

NHPC defended the process, stating that it was conducted in line with standard bidding guidelines, ensuring transparency, competition, and cost efficiency.

Commission’s Analysis

CERC observed that the bidding process complied with Ministry of Power guidelines and was conducted transparently, with adequate participation ensuring competitive tariff discovery.

The Commission emphasized that tariffs discovered in the e-reverse auction are to be adopted if the process is fair and transparent, and found no reason to reject the discovered rates.

However, the Commission restricted Avaada Energy’s awarded capacity of 600 MW under the greenshoe option to 210 MW.

It also directed all renewable energy implementing agencies, including NHPC, to approach the Ministry of Power for clarification on the greenshoe option, including the manner of allocation of additional capacity, including but not limited to applicability of the 50% cap in the context of allocation, particularly where excess capacity arises due to non-acceptance by other bidders.

On the issue of trading margin, CERC reiterated that NHPC’s role as an intermediary is limited to facilitation rather than active trading, and that any trading margin must align with regulatory norms and be capped as per guidelines.

It added that the trading margin should be mutually agreed upon by the trading licensee and the seller.

CERC observed that if the distribution licensees agree to a trading margin of ₹0.07 (~$0.0007)/kWh, it will be in consonance with the trading licence regulations.

However, in case of failure by NHPC to provide an escrow arrangement or an irrevocable revolving letter of credit to the wind-solar hybrid power generators, the trading margin should be limited to ₹0.02 (~$0.0002)/kWh.

Last December, CERC approved the adoption of the tariff discovered through competitive bidding for a 300 MW ISTS-connected wind power project awarded by the Solar Energy Corporation of India.

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