The India Power Corporation (IPCL), one of the state’s power distribution companies, has been given permission by the West Bengal Electricity Regulatory Commission (WBERC) to purchase 100 MW of round-the-clock (RTC) renewable power from the Solar Energy Corporation of India (SECI) at a cost of Rs. 2.90/kWh plus the trading margin of Rs. 0.07/kWh.
IPCL had submitted a petition asking for approval of a power selling agreement (PSA) with a 25-year duration at a price established by competitive bidding.
On October 18, 2019, SECI issued a request for proposals for the long-term acquisition of 400 MW of RTC electricity. ReNew Power won the auction for the whole capacity that had been offered at a price of Rs. 2.90/kWh.
Later, IPCL and SECI agreed to a PSA under which IPCL will buy 100 MW of RTC electricity for 25 years beginning with the project’s projected commissioning.
The tariff for the first year was set at Rs. 2.90/kWh, with annual increases of 3% for the first 15 years and no increases thereafter for the remaining project’s lifespan. A trading margin of Rs. 0.07/kWh was also due to SECI for the duration of the contract.
IPCL noted that using RTC electricity will help them fulfill their commitment to acquire solar and non-solar renewable energy while offsetting the cost of their short-term power purchase agreements.
According to IPCL’s submission, the cost of power, including transmission fees and losses, came to Rs. 3.31/kWh, which was significantly less expensive than the long-term power purchase agreement that was previously in place for the purchase of RTC power with the Damodar Valley Corporation and the West Bengal State Electricity Distribution Company.
On May 31, 2022, the Commission ordered IPCL to provide a load generation balance study justifying the purchase of 100 MW of RTC electricity. The average demand from 2018–19 to 2021–22 was subsequently supplied by IPCL, who forecast that it would reach 256 MW in 2024–25.
The Commission noted that the projected RTC renewable energy would aid IPCL in expanding its portfolio of renewable energy. Further, during FY 2021–2022, the price of RTC electricity was less than that of renewable power, which was Rs. 5.29/kWh as seen on the Indian Energy Exchange.
WBERC observed that the price of Rs. 2.90/kWh found in accordance with the rules for competitive bidding was reasonable and advantageous to the final consumers. Additionally, the trading margin of Rs. 0.07/kWh was allowed.