CERC Authorizes Rs. 2.37-2.38/kWh Tariff For 1.4 GW Solar Power Projects Linked to ISTS

The Central Electricity Regulatory Commission (CERC) has authorized Rs. 2.37/kWh and Rs. 2.38/kWh tariff for 1,400 MW (1.4GW) of solar power projects (Tranche-IX) linked to the interstate transmission system (ISTS).

The trading margin of Rs. 0.07/kWh, as stipulated in the power selling agreements (PSAs), has also been approved by the Commission.

The Commission stated that, in accordance with the terms of the power purchase agreements (PPAs), the Great Indian Bustard problem, changes in the rates of the Safeguard Duty, Basic Customs Duty (BCD), and Goods and Services Tax (GST) on solar inverters were “Change in Law” occurrences.

According to the rules established by the Ministry of Electricity, SECI had submitted a petition for the establishment of tariffs for 2,000 MW

On March 20, 2020, SECI invited bids for the selection of developers for 2,000 MW of ISTS-connected solar power projects (Tranche-IX). On June 30, 2020, the reverse auction was held, and seven bids with a combined capacity of 2,000 MW were chosen.

Earlier, SECI had already submitted a petition for the establishment of tariffs to the Commission for 2,000 MW.

However, with respect to a capacity of 300 MW, for which the PPA was signed with the developers, the Commission prohibited the adoption of tariffs for the remaining capacity of 1,700 MW and   permitted SECI to approach it to implement the tariff for the remaining capacity after signing the PPAs and PSAs.

After the PSAs that SECI had signed with the distribution firms (DISCOMs), SECI stated that it had signed PPAs with the successful bidders for 1,400 MW of the total 1,700 MW.

Thus, holding off from employing the remaining capacity until the PSAs and PPAs were finalized, SECI requested the introduction of tariffs for 1,400 MW of capacity.

The Commission stated that SECI had earlier made clear that all PPAs and PSAs completed under the Tranche IX program should be subject to the “Change in Law” provisions and the restitution provision regarding the carrying cost as set forth in the guidelines.

The rise in BCD for solar inverter imports and the increase in the GST rate from 5% to 12% for solar modules, cells, and other solar power production equipment were both acknowledged by the Commission as “Change in Law” occurrences.

However, CERC denied the developers’ request to have the BCD of 25% for solar cells and 40% for solar modules recognized as “Change in Law” events under the PPAs they had signed with SECI.