Odisha Electricity Regulatory Commission (OERC) has approved the standard, and supplementary power sale agreement (PSA) executed between the Solar Energy Corporation of India (SECI) and Grid Corporation of Odisha (GRIDCO). The PSAs are for the 500 MW solar projects under the manufacturing-linked and interstate transmission system (ISTS)-connected solar program (Tranche- I). The power will be procured to fulfill the renewable purchase obligation (RPO) of GRIDCO.

The Commission stated that the Ministry of New and Renewable Energy (MNRE) had directed that the bids for solar projects submitted before March 9, 2021, be exempted from the Basic Customs Duty (BCD) on the import of solar cells and modules. Hence, BCD would not be imposed for the 500 MW project as the tender was issued before March 9, 2021.

Background

In August 2020, SECI had offered a tariff of ₹2.73 (~$0.037)/kWh, including the trading margin of ₹0.07 (~$0.0009)/kWh for power from the 500 MW solar project, to be available by December 2022. It also offered an additional 250 MW solar capacity at ₹2.99 (~$0.041)/kWh, including the trading margin of ₹0.07 (~$0.0009)/kWh.

Later, SECI proposed an additional 1,500 MW solar capacity at ₹2.73 (~$0.037)/kWh and 250 MW solar at ₹2.99 (~$0.041)/kWh to be availed from 2023 to 2025.

GRIDCO, in its submission, said that with a total solar tied-up capacity of 1,014 MW and a non-solar capacity of 479.15 MW, it would be able to meet the RPO target for FY 2021-22. But it had considered procuring 500 MW of solar power from SECI to address the immediate RPO shortfall and a projected increase in the state power consumption from FY 2022-23.

GRIDCO is also preparing for the likely upward revision of the RPO target, compensating for non-solar projects that are yet to be commissioned and no new solar projects in the pipeline for the next two years.

In July 2021, OERC approved 500 MW solar power procurement by GRIDCO from SECI. The project is being developed under the ISTS-connected solar projects linked with the manufacturing program (Tranche-I). GRIDCO will be buying the power to fulfill its RPO targets.

The Commission had directed the tariff to be capped at ₹2.61 (~$0.035)/kWh, including the trading margin of ₹0.07 (~$0.0009)/kWh as proposed by GRIDCO.

Commission Analysis

OERC observed that there had not been any change in the applicable tariff rate of ₹2.61 (~$0.035)/kWh (including SECI margin of ₹0.07/ kWh) and other provisions of the PSA. Hence, as per the PSA between SECI and GRIDCO, the tariff was set at ₹2.61 (~$0.035)/kWh.

The Commission noted that the order on waiver of transmission losses was made based on the submission of GRIDCO. The Commission accordingly clarified that waiver of interstate transmission charges and losses is governed by orders of the Ministry of Power (MoP). As per recent orders issued by MoP, the ISTS losses should be borne by the buying entity.

OERC also added that the power would be delivered through SECI at the set tariff at the periphery of Odisha without levying any interstate transmission charges and losses. Also, as the tender was issued before March 9, 2021, by SECI, BCD would not be applicable for the project.

The state regulator approved the standard PSA and the supplementary PSA executed between SECI and GRIDCO towards procuring power from the 500 MW solar project under the manufacturing-linked and ISTS-connected solar program (Tranche- I) to fulfill the RPO target of GRIDCO.

In September 2021, OERC approved the power purchase agreement (PPA) signed between GRIDCO and NHPC Limited to procure 40 MW of solar power at ₹2.75 (~$0.037)/kWh.

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