DERC Approves 100 MW Solar Power Purchase Agreement At ₹2.44/Kwh For TPDDL-SECI Deal Amid Legal Battles

The Delhi Electricity Regulatory Commission (DERC) recently reviewed a petition filed by Tata Power Delhi Distribution Ltd. (TPDDL). The petition sought approval for a Supplementary Power Sale Agreement (SPSA) between TPDDL and the Solar Energy Corporation of India (SECI). This agreement is an extension of a prior agreement made on September 6, 2018, for the long-term sale of 100 MW of solar power.

TPDDL is a licensed electricity distributor in North and Northwest Delhi, operating under the Electricity Act, 2003, and the Delhi Electricity Reforms Act, 2000. SECI, a public sector undertaking under the Ministry of New and Renewable Energy, was established to promote and develop solar energy projects in India. SECI plays a crucial role in implementing the Jawaharlal Nehru National Solar Mission (NSM) and facilitating the development of grid-connected solar power projects.

TPDDL initially signed a Power Sale Agreement (PSA) with SECI in 2018, agreeing to purchase 100 MW of solar power. SECI, in turn, entered into Power Purchase Agreements (PPAs) with selected solar power developers (SPDs) for a total of 2,000 MW. One of the successful bidders was ACME Solar Holdings Limited, which received a letter of award for developing 300 MW of solar power projects.

However, several regulatory hurdles and legal challenges ensued, particularly concerning the tariff rates and trading margins. The Central Electricity Regulatory Commission (CERC) initially adopted a tariff of ₹2.44/kWh but did not fix a trading margin, leaving it to be mutually agreed upon by the contracting parties. Subsequently, TPDDL filed for approval of the PSA and tariff rates with both the DERC and CERC, resulting in a series of legal and regulatory proceedings.

In a significant development, the Appellate Tribunal for Electricity (APTEL) overturned a DERC order that had reduced the trading margin from ₹0.07/kWh to ₹0.02/kWh, reinstating the original margin of ₹0.07/kWh. This decision was later contested in the Supreme Court, where the case is still pending.

Amidst these ongoing legal disputes, SECI proposed amendments to the original PSA to align with CERC’s orders and the mutual agreements between the parties. The SPSA includes specific clauses detailing the applicable tariffs and trading margins, which are to be ₹2.44/kWh plus a trading margin of ₹0.07/kWh. The agreement also outlines the maximum and minimum energy purchase obligations for TPDDL, based on the individual capacities of the solar projects developed by ACME Solar.

The Commission’s order acknowledges the various submissions and legal precedents set by CERC and APTEL, emphasizing the need for a transparent and fair agreement that reflects the mutually agreed terms between TPDDL and SECI. Consequently, DERC approved the SPSA, subject to the final ruling of the Supreme Court on the trading margin issue.

This decision represents a critical step in ensuring the continued development and integration of solar power into Delhi’s energy grid, promoting renewable energy sources, and supporting India’s broader energy sustainability goals. The approved SPSA will facilitate the procurement of solar power by TPDDL from SECI, ensuring a stable and consistent supply of renewable energy for the region.

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