CERC Approves Tariff For SJVN Limited’s 1,500 MW Solar Power Project Under India’s ISTS

The petition submitted by SJVN Limited seeks the adoption of tariffs for a 1,500 MW solar power project that connects with India’s Inter-State Transmission System (ISTS). The petition, registered under Section 63 of the Electricity Act, 2003, focuses on tariffs discovered through a competitive bidding process for grid-connected solar photovoltaic projects. SJVN Limited filed this petition to seek approval for the tariffs and to establish agreements with various power companies. The objective is to support India’s renewable energy goals by enabling these projects to be set up across the country.

SJVN Limited published a Request for Selection (RfS) document on October 31, 2023, seeking bids from companies to establish solar power projects. Ten bidders responded, and following technical evaluations, nine companies were shortlisted. The e-reverse auction took place on February 8, 2024, where five companies were selected to fulfill the 1,500 MW capacity target. These companies included JSW Neo Energy Limited, Furies Solren Private Limited, Solarcraft Power India 8 Private Limited, GRT Jewellers (India) Private Limited, and NTPC Renewable Energy Limited (NREL), with capacities ranging from 50 to 700 MW. However, NTPC later withdrew its 50 MW capacity, reducing the total project capacity to 1,450 MW.

Following the competitive bidding, SJVN issued Letters of Award to the selected bidders on February 26, 2024. Subsequently, Power Sale Agreements (PSA) and Power Purchase Agreements (PPA) were signed, tying the awarded capacities to Punjab State Power Corporation Limited (PSPCL). The awarded tariffs ranged between INR 2.52 and INR 2.54 per kWh, agreed upon through back-to-back arrangements in the PSA and PPA. By June 27, 2024, SJVN finalized the agreements with each company, confirming their respective capacities. Notably, one of the bidders, JSW Neo Energy Limited, voluntarily reduced its tariff from INR 2.53 to INR 2.52 per kWh for a 700 MW capacity.

During a hearing on September 5, 2024, the Central Electricity Regulatory Commission (CERC) directed SJVN to provide documents detailing the constitution of the Bid Evaluation Committee, the publication details of the RfS, and compliance certificates confirming adherence to the guidelines. SJVN submitted the required documents on September 20, 2024, including a conformity certificate affirming compliance with the competitive bidding process and that the discovered tariffs were reasonable.

Further, Furies Solren Private Limited filed a response on September 23, 2024, expressing no objections to the tariff adoption. However, during the October 23, 2024 hearing, Furies Solren pointed out discrepancies regarding the start date for connectivity and the scheduled commissioning of its project. This issue was noted, with the understanding that Furies Solren may initiate additional proceedings if necessary.

In its review, the CERC found that SJVN had adhered to the Ministry of Power’s competitive bidding guidelines, ensuring transparency in the bidding process. The CERC adopted the tariffs for each project, with tariffs set to remain valid throughout the PPA and PSA periods. The CERC also reviewed SJVN’s request for a trading margin of INR 0.07 per kWh for transactions with distribution companies. This request aligns with Regulation 8(1)(d) of the Trading Licence Regulations, which allows the trading margin if SJVN establishes an escrow arrangement or an irrevocable, unconditional, and revolving letter of credit. If this arrangement is not met, the trading margin will be capped at INR 0.02 per kWh as specified in the Trading Licence Regulations.

The petition by SJVN Limited was approved by the CERC, which accepted the tariffs discovered through the competitive bidding process. The Commission’s decision supports the setup of large-scale solar power projects and the transition to renewable energy, contributing significantly to India’s renewable energy targets under the Electricity Act, 2003.