OERC Allows 200 MW Of Solar Power Procurement By GRIDCO To Meet RPO

In order to fulfill the state’s renewable purchase obligation (RPO), the Grid Corporation of Orissa (GRIDCO) and NTPC Limited have a power sale agreement (PSA) for 200 MW of solar projects connected to the interstate transmission system (ISTS) that has been approved by the Odisha Electricity Regulatory Commission (OERC).

Earlier, for the RPO demand of GRIDCO, NTPC proposed a solar power capacity of 400 MW at a rate of Rs. 2.50/kWh, including a trading margin of Rs. 0.70 to be made available after 2024.

Given the increasing state consumption starting in the financial year 2024–2025, GRIDCO chose to purchase 200 MW of solar power out of the 400MW available. A PSA was signed between GRIDCO and NTPC to purchase the 200 MW of solar energy for Rs. 2.50/kWh for 25 years, since the quoted price was extremely competitive.

GRIDCO will reach the solar RPO of 9.75% by FY 2024–25 with the 1,731 MW of solar tied-up capacity and the 479.15 MW of non-solar tied-up capacity. Since GRIDCO’s existing solar power supply is adequate to fulfill the solar RPO through FY 2025–2026, it could not need this power in 2024.

When GRIDCO asked for suggestions from the state’s distribution companies, Tata Power Western Odisha Distribution (TPWODL), suggested that, given the unpredictability of the market, acquiring the 200 MW at a competitive rate seemed sensible.

Thus, because the power has a low landed cost, GRIDCO decided it would be wise to keep it for the state. It estimated an RPO objective of 30% by FY 2029–30, which may increase, in the absence of any RPO targets beyond FY 2024–25. Even in FY 2025–2026, GRIDCO could require 200 MW to satisfy any increased RPO.

The government has granted a waiver up to June 2025, so the solar energy from NTPC will be provided to Odisha’s periphery without any ISTS costs. Therefore, GRIDCO granted NTPC an in-principle approval to purchase 200 MW more of solar energy for 25 years without paying any ISTS fees in basic customs duty.

According to the commission, the NTPC tariff proposal seemed competitive over a 25-year timeframe. The basic customs duty will not apply to the tariff, and ISTS fees and losses will not be required to be paid. 

The commission emphasized that in order to fulfill expanded RPOs, additional renewable power may be needed beyond the financial year 2024–2025 in addition to the currently tied-up capacity.

In order to meet its RPO, the regulator, therefore, allowed the PSA that would be signed by GRIDCO and NTPC to purchase 200 MW of solar energy through ISTS-connected projects.