Rajasthan’s Renewable Energy Tariff Dispute: Examining The Case Of RVUN’s 900 MW Solar Project

Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN) recently filed a petition seeking approval for a tariff for a new 900 MW solar power project to be installed by Coal India Limited (CIL) within RVUN’s 2,000 MW Solar Park. This petition aimed to have the tariff for the new project adopted under the same terms and conditions discovered through a competitive bidding process for RVUN’s earlier 810 MW solar project.

The petition, supported by a series of guidelines from the Ministry of Power, is part of a broader initiative to increase renewable energy adoption by combining it with existing thermal and hydropower generation. The scheme, designed to replace more expensive thermal energy with renewable energy, included several amendments aimed at facilitating the bundling of renewable energy with traditional power sources.

RVUN had previously entered into a Memorandum of Understanding (MoU) with CIL in October 2022 to install this solar power project. Following this, a bidding process was conducted for the earlier 810 MW project, which resulted in a winning bid of ₹2.64 per kWh from NLC India Limited. This rate was then proposed for the new 900 MW project.

In response to the petition, the Rajasthan Urja Vikas Nigam Ltd. (RUVNL) submitted its reply, and the matter was heard in late April 2024. Representatives for both the petitioner and respondents presented their arguments, focusing on whether the tariff adoption process adhered to the required guidelines and competitive bidding procedures.

The petitioner argued that the new 900 MW project should adopt the same tariff rate of ₹2.64 per kWh as the previous 810 MW project, citing the MoU with CIL and the existing competitive bidding process. They highlighted that this approach aligns with the Ministry of Power’s directive to promote renewable energy through flexible generation and scheduling.

However, the respondents raised concerns about the transparency and conformity of the bidding process for the new project. They stressed that any tariff adoption should strictly follow the competitive bidding guidelines to ensure fairness and transparency. The respondents also pointed out that no separate bidding process was conducted for the 900 MW project, which they argued was essential under the relevant guidelines.

The petitioners countered that the MoU with CIL and the established tariff from the earlier project justified the direct adoption of the same terms and conditions. They emphasized that this method would facilitate the timely implementation of the renewable energy project, benefiting both RVUN and the state’s energy consumers.

Despite these arguments, the commission noted that the petitioner had not conducted a new bidding process for the 900 MW project, which was a crucial requirement under the Ministry of Power’s guidelines. The commission observed that adopting the tariff without a new competitive bidding process would be contrary to the established guidelines and procedures.

As a result, the commission decided not to approve the tariff for the 900 MW solar project based on the terms and conditions of the previous 810 MW project. They concluded that a transparent and compliant bidding process was necessary to ensure the fair adoption of tariffs for new renewable energy projects.

The petition was ultimately dismissed, with the commission advising that any future tariff adoption must strictly adhere to the competitive bidding requirements. This decision underscores the importance of transparency and compliance in the procurement of renewable energy projects, aiming to maintain fairness and integrity in the adoption of tariffs and the promotion of renewable energy sources.

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