The Solar Energy Corporation of India Limited (SECI) has filed a petition under Section 63 of the Electricity Act, 2003. The petition seeks the adoption of tariff for 334 MW Solar Power Plants connected to the Interstate Transmission System (ISTS) and linked with the setting-up of a Solar Manufacturing Plant. These projects were selected through a competitive bidding process based on the guidelines issued by the Ministry of Power, Government of India.
Background
SECI initiated the bidding process in June 2019 by issuing a Request for Selection (RfS) for the “Selection of Solar Power Developers for Setting up of 7 GW ISTS Connected Solar PV Power Plants linked with Setting up of 2 GW (Per Annum) Solar Manufacturing Plant under Global Competitive Bidding.” The tender was divided into two packages: Package A for Solar Manufacturing Plants related to Cell and Modules, and Package B for Ingots and Wafers. Bidders were assured Power Purchase Agreements (PPAs) up to 2,000 MW for Package A and 1,500 MW for Package B.
During the bidding process, three bids were received offering a total capacity of 8 MW under Package A. Azure Power and Adani Green Energy were the successful bidders, each allocated 2,000 MW at a tariff of ₹2.92/kWh. Later, a portion of the under-subscribed capacity under Package B (up to 4,000 MW) was transferred to Package A, and Adani Green accepted the entire transferred capacity at the same tariff.
The Process
SECI then recommended a Green Shoe Option to the successful bidders, providing an additional 2,000 MW capacity to both Azure Power and Adani Green at ₹2.92/kWh. Letters of Awards (LoAs) were issued, and both bidders accepted the additional capacity. The final awarded capacity was 4,000 MW for Azure Power and 8,000 MW for Adani Green, all at a tariff of ₹2.92/kWh.
As per the bid terms, PPAs were signed for four packages (Package I to IV), with each package comprising 3,000 MW, making a total of 12,000 MW under Package A. Subsequently, Adani Green and Azure Power voluntarily reduced the quoted tariff for different packages, which led to the signing of PPAs with distribution utilities in several states.
SECI filed a petition for the adoption of the tariff for the capacity for which PPAs and Power Sale Agreements (PSAs) had been executed. The Commission adopted the tariff for 8,900 MW of the solar capacity.
Current Developments
SECI has now entered into PSAs with Brihanmumbai Electric Supply and Transport (BEST) for 234 MW and with Tripura State Electricity Corporation (TSECL) for 100 MW. These projects are expected to be commissioned in the financial year 2024-25.
SECI has filed the present petition for the adoption of a tariff for an additional capacity of 334 MW under Package I. This request aligns with the Commission’s earlier order, which granted SECI the liberty to seek tariff adoption for the remaining balance capacity once PPAs and PSAs are executed.
Change in Law Requests
In response to SECI’s tariff adoption petition, Adani Green Energy Twenty-Six A Limited (AGE26AL) has raised concerns about changes in GST rates and the imposition of Basic Custom Duty (BCD) on Inverters and Trackers by the Ministry of Finance. AGE26AL has issued Change in Law notices highlighting the adverse impact of these changes on solar power generators.
The dispute centres on whether these changes in law should be recognized as Change in Law events, which may result in additional costs to the solar power generators. AGE26AL argues that the regulatory framework allows the Commission to adjudicate on such claims even during the tariff adoption process.
However, it’s essential to note that SECI’s petition primarily focuses on tariff adoption, and AGE26AL’s Change in Law claims should be addressed in a separate petition, in accordance with the relevant legal procedures.
The adoption of solar power tariffs in India is a complex process involving competitive bidding and agreements with multiple stakeholders. While the Solar Energy Corporation of India Limited has successfully secured tariffs for a substantial portion of its solar capacity, recent changes in law have raised questions about potential additional costs. These issues must be addressed in accordance with the legal framework, ensuring transparency and fairness in the energy sector.
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