NHPC Secures Approval For 1,000 MW Solar Power Usage Charges Of ₹2.45/kWh Under CPSU Scheme Phase-II

In a petition submitted by NHPC Limited, the company sought the adoption of usage charges for a 1,000 MW Solar Photovoltaic Power Station connected to the Inter-State Transmission System (ISTS). This was part of a broader plan under the Central Public Sector Undertaking (CPSU) Scheme Phase-II, launched by the Ministry of New and Renewable Energy in 2019. This initiative aims to establish grid-connected solar power projects with viability gap funding for government producers, ensuring the usage of solar power by government entities.

NHPC requested that the Commission approve a usage charge of ₹2.45/kWh, mutually agreed upon between NHPC and the procurers, following a competitive bidding process managed by IREDA. NHPC was allocated 1,000 MW of capacity through this bidding process. The power from these projects is to be used exclusively by government entities, with the pricing agreed upon with distribution companies in states like Punjab, West Bengal, and Telangana.

The background of the petition shows that the CPSU Scheme is designed to promote the use of domestically manufactured solar components and to encourage government producers to generate solar power for their use or use by other government entities. The scheme sets a ceiling for usage charges to ensure affordability while allowing for competitive bidding to determine the exact charges.

In the bidding process, IREDA, the designated implementing agency, issued a request for the selection of bidders for the setup of 5,000 MW of grid-connected solar projects. Several extensions were given to ensure that bidders had enough time to submit their offers. The ceiling for usage charges, initially set at ₹3.50/kWh, was reduced to ₹2.45/kWh, following a directive from the Ministry of New and Renewable Energy. After the bidding concluded, NHPC was one of the successful bidders, securing a 1,000 MW capacity allocation.

Upon successful bidding, NHPC signed Power Usage Agreements (PUAs) with distribution companies in West Bengal, Punjab, and Telangana for the sale of solar power generated through its projects. These states, through their regulatory commissions, approved the procurement of solar power from NHPC on a long-term basis, subject to the adoption of the mutually agreed usage charges by the central regulatory commission.

In its final decision, the Commission examined the bidding process and found that it adhered to the CPSU Scheme guidelines, ensuring transparency and compliance. IREDA confirmed that no deviations from the guidelines were made during the bidding, and the process followed the principles of competitive bidding as outlined in the relevant legal provisions.

Given that the usage charges were within the prescribed ceiling and agreed upon through a transparent bidding process, the Commission approved the adoption of the Rs. 2.45/kWh charge for the 1000 MW Solar Photovoltaic projects. This decision helps NHPC move forward with its solar power projects, ensuring the supply of clean energy to government entities while supporting the broader goal of increasing the country’s solar power capacity.

This case underscores the importance of transparent bidding and mutual agreements in the energy sector, ensuring that both affordability and efficiency are prioritized in the development of large-scale solar projects.