SJVN Limited Seeks Approval For Renewable Energy Tariffs For 1,500 MW In Competitive Bidding Process

SJVN Limited has filed a petition for the approval of tariffs for supplying 1,500 MW of firm and dispatchable power from renewable energy projects connected to the ISTS (Inter-State Transmission System) with energy storage systems. This project carried out on a Build-Own-Operate basis, includes an option to expand the capacity by an additional 1,500 MW. The process was executed following guidelines for competitive bidding, aimed at ensuring a transparent and fair selection process.

The Ministry of New and Renewable Energy has designated SJVN as an intermediary procurer, responsible for facilitating the procurement of firm and dispatchable renewable energy power by distribution companies from grid-connected renewable energy projects. After obtaining the necessary approvals, SJVN formed a Tender Committee to oversee the project. The bids were evaluated based on the submitted documents and adherence to the evaluation criteria.

On June 20, 2023, SJVN issued a Request for Selection (RfS) to select renewable energy power developers for the supply of 1,500 MW of firm and dispatchable power from ISTS-connected renewable energy projects with energy storage systems. This RfS was amended on August 4, 2023, to include the “Greenshoe Option,” allowing an additional capacity of up to 1,500 MW. SJVN informed the relevant authorities about the tendering process and the additional capacity on July 17 and August 17, 2023.

Through Amendment No. 1 to the RfS, SJVN offered the additional capacity under the Greenshoe Option to successful bidders willing to execute Power Purchase Agreements (PPAs) at the lowest tariff discovered during the competitive bidding process. This arrangement involves SJVN procuring power from the successful bidders and selling it to distribution companies on a back-to-back basis.

The tender process received bids for a total capacity of 1,480 MW against the tendered 1,500 MW, with seven bidders found eligible for a total of 1,184 MW. Confirmation was sought from these bidders regarding their interest in the Greenshoe Option. As a result, SJVN issued Letters of Award to successful bidders for a total capacity of 2368 MW, comprising the initially allocated 1,184 MW and an additional 1,184 MW under the Greenshoe Option.

At the time of filing the petition, SJVN had not yet secured agreements with any distribution companies. However, during the hearing, it was reported that SJVN had entered into Power Sale Agreements (PSAs) with several distribution companies, ensuring the sale of the entire 2368 MW capacity to the successful bidders. SJVN also received offers for the remaining additional power under the Greenshoe Option, which had not yet been allocated. The company approached the Ministry of New and Renewable Energy for clarification on this matter.

SJVN’s counsel presented copies of the PSAs with Maharashtra State Electricity Distribution Co. Ltd., Noida Power Co. Ltd., and Haryana Power Purchase Centre. Additionally, SJVN had signed PPAs with successful developers for a total capacity of 2,368 MW. The entire bidding process was conducted transparently, adhering to all guidelines for competitive bidding. The power sale and purchase agreements, as well as the competitive bidding guidelines, ensure that the process remains fair and standardized.

The guidelines for the procurement process include specific objectives such as providing firm and dispatchable power to distribution companies from renewable energy sources, facilitating renewable capacity addition, and fulfilling renewable purchase obligations. The process is designed to be transparent, fair, and based on open competitive bidding, with appropriate risk-sharing among stakeholders.

The guidelines also cover aspects such as land acquisition, connectivity, reporting requirements, and the integration of energy storage systems with renewable energy projects. The bidding evaluation is based on the tariff per unit of firm and dispatchable renewable energy power, with a single tariff quoted for the entire term of the PPA.

The PPAs outline the terms for the purchase of power from the generators, ensuring that the supply meets specified conditions. Compensation mechanisms are in place for deviations from the schedule, and penalties are imposed for shortfalls in project availability. The guidelines also include provisions for payment security, force majeure, and the rights of lenders in case of default.

SJVN’s petition for the approval of tariffs for supplying 1,500 MW of firm and dispatchable power from renewable energy projects, with an option for an additional 1,500 MW, follows a transparent and fair competitive bidding process. The guidelines ensure a standardized procurement framework, with appropriate risk-sharing and provisions for the successful execution of the project.