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					</table>The Rajasthan Electricity Regulation Commission (<a href="https://rerc.rajasthan.gov.in/" target="_blank" rel="noopener">RERC</a>) has approved the final levelized tariff for Jaipur Vidyut Vitran Nigam&#8217;s (<a href="https://energy.rajasthan.gov.in/jvvnl/" target="_blank" rel="noopener">JVVNL</a>) and six projects of Jodhpur Vidyut Vitran Nigam&#8217;s (<a href="https://energy.rajasthan.gov.in/jdvvnl/" target="_blank" rel="noopener">JdVVNL</a>) solar projects under Component-C (Feeder Level Solarization) of the PM Kusum Program.
The order, issued in response to petitions by the two DISCOMs, pertains to 75 JVVNL solar projects with a total capacity of 208.91 MW and six JdVVNL projects with a total capacity of 13.12 MW.
The Commission approved tariffs for the solar projects in the range of ₹2.898-₹3.309 (~$0.034-$0.039)/kWh and ₹2.900-₹3.31 (~$0.034-$0.039)/kWh for two tenders floated by JVVNL and ₹3.032-₹3.421 (~$0.036-$0.04)/kWh for six tenders floated by JdVVNL.
Background
JVVNL&#8217;s petition
JVVNL identified 86 solar power projects with a total capacity of 231.52 MW to be installed near 68 units of 33/11 kV substations serving 22,923 agricultural consumers.
The projects were floated under two tenders (11 and 12) of 49 solar projects (129.45 MW) and 37 solar projects (102.07 MW). JVVNL received bids for 76 projects with a total capacity of 212.70 MW.
The DISCOM received bids with tariffs in the range of ₹2.898-₹3.90 (~$0.034-$0.046)/kWh for tender 11 (115.80 MW) and ₹2.90–₹3.95 (~$0.034-$0.047)/kWh for tender 12 (96.90 MW).
JVVNL computed levelized tariffs for the projects by considering prevailing market trends, including inputs received from solar module manufacturers, vendors, and bidders during negotiation meetings.
Considering that all solar power projects have different capacities, the capital costs of each project comprise variable and fixed expenses such as life cycle, debt-equity ratio, capacity utilization factor, loan tenure, interest rate, depreciation, return on equity, interest on working capital, O&amp;M expenses, annual cash flow and discounting rate, and degradation factor.
They also include the mandatory cost of installing a Remote Monitoring System to calculate the tariff.
The individual solar power project capacity has been calculated based on agricultural consumers&#8217; actual annual energy consumption of 11kV and a capacity utilization factor of 19%. For Central Financial Assistance, the yearly energy consumption of individual agricultural consumers with more than 7.5 HP pump capacity has been proportionately reduced to 7.5 HP. Subsequently, the individual SPV plant capacity and CFA at ₹10.5 million (~$125,182) per MW have been computed.
This resulted in the computation of CFA in the range of ₹3.8 million–₹10.2 million (~$45,304-$121,605) per MW for tender 11 and ₹4.9 million–₹10.1 million (~$58,418-$120,413) per MW for tender 12.
The levelized tariff for the majority of the projects was within acceptable limits, with no variations under the applicable land lease rent of ₹80,000 (~$953.768) per hectare/year.
Additionally, based on market prevailing rates, Corporate Level Procurement committee (CLPC) decided to reduce the interest rate under debt and working capital servicing from 12% to 10.50% to compute the levelized tariff.
JVVNL computed levelized tariff for projects without a land lease, with minimum land lease rent of ₹80,000(~$953.768)/hectare/year) and maximum land lease rent of ₹160,000 (~41,907.54)/hectare/year) for offering counter rates.
The levelized tariff was also impacted by increased GST from 5% to 12% on solar modules and inverters and the imposition of essential customs duty on solar cells and modules.
Counter offers were made, and a levelized tariff was accepted for five solar projects under tender 11 and two under tender 12. Additionally, 25 and 22 projects were received on reduced levelized tariffs under tenders 11 and 12, respectively. For 12 solar projects, 9 accepted the counteroffer, and a reduced levelized tariff was rejected for one.
Subsequently, JVVNL issued 75 letters of intent, all of which were accepted.
The DISCOM requested a levelized tariff within the range of ₹2.898-₹3.309 (~$0.034-$0.039)/kWh for tender 11 and ₹2.9-₹3.31 (~$0.034-$0.039) for tender 12.
The DISCOM further highlighted that the final levelized tariff was calculated based on actual CFA for 7.5 HP pumps. However, if the projects had been offered the full CFA of ₹1.05 (~$0.012) per MW, the levelized tariff would have been further reduced.
JdVVNL&#8217;s petition
JdVVNL floated 63 tenders for 2,158 solar projects with a total capacity of 5744.58 MW. The projects were to be installed near 1,640 33/11 kV substations with 277,792 agricultural consumers.
The Commission initially approved the tariff for the 1,111 projects floated under 63 tenders on May 1, 2024. For 38 projects, the Commission approved the tariff.
However, the bidders submitted their acceptance of counteroffer rates by the DISCOM after the scheduled submission date for six tenders. Further, the Model Code of Conduct was in force from March 16, 2024, to June 4, 2024. With the issuance of MNRE orders for non-exemption of DCR for solar cells and modules after March 31, 2024, bidders were asked to agree to counteroffer tariffs.
JdVVNL requested the Commission to approve the project-wise tariff in the range of ₹3.032-₹3.421(~$0.036-$0.04).
Commission&#8217;s Analysis
While approving the tariffs for the projects under the two DISCOMs, the Commission said feeder-level solarization under Component C of PM-Kusum, CFA is limited to solar capacity for 7.5 HP pumps. However, per the request for selection, the CFA has been calculated based on per HP annual consumption (1,451 units) or 80% of power transformer capacity, whichever is less.
The DISCOMs were asked to explore the possibility of awarding tenders where multiple substations may be grouped as one bidding group. The developers may quote a standard tariff for all projects under one group and sign a single power purchase agreement with the DISCOM.
The Commission also asked the DISCOMs to conduct system studies/load flow studies. It stressed the need for integrating more distributed power. It added that with many such projects, certain system studies will be required, and the need for storage and another balancing measure may arise.
The Commission noted that DISCOMs had received approval for 100,000  agriculture pumps for Rajasthan State. However, the DISCOMs had not reported the implementation status. It asked them to report the progress while filing future petitions.
In July 2024, the Rajasthan Electricity Regulatory Commission <a href="https://www.mercomindia.com/rerc-approves-tariff-projects-in-rajasthan" target="_blank" rel="noopener">approved</a> Rajasthan Urja Vikas &amp; IT Service &#8216;s procurement of 1,000 MW of solar power from seven developers.
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