CERC Approves NTPC’s Tariff For 1,000 MW Wind-Solar Hybrid Power Project, Boosting India’s Renewable Energy Capacity

In a recent decision, the Central Electricity Regulatory Commission (CERC) approved a tariff proposed by NTPC Limited for a 1,000 MW Wind-Solar Hybrid Power Project. This project, designated as NTPC-Tranche-V, was developed under a transparent competitive bidding process in line with national guidelines for renewable energy projects. The primary aim of this initiative is to increase the capacity for renewable energy across India by integrating wind and solar power sources, enhancing the country’s energy mix.

The competitive bidding began on February 1, 2024, when NTPC invited bids for hybrid power projects through a Request for Selection (RfS) posted on both its website and a government procurement portal. The process received strong interest, with seven companies submitting bids totaling 1,650 MW, significantly exceeding the target capacity. After evaluating the technical and commercial viability of these bids, six companies were shortlisted for a final e-reverse auction, held on April 17, 2024. This auction determined the final tariff for each bidder, leading to the selection of five companies to deliver the project: Renew Solar Power, AMPIN Energy Utility, Juniper Green Energy, Avaada Energy, and Sprng Energy.

The tariff agreed upon through the auction was in the range of ₹3.41 to ₹3.47 per kWh, reflecting competitive pricing within the renewable sector. Each of the successful companies received a specific capacity allocation, totaling 1,000 MW across various regions in India. These companies will operate the wind-solar hybrid projects on a Build-Own-Operate (BOO) model for a duration of 25 years, during which they will supply power through inter-state transmission systems.

Following the auction, NTPC issued Letters of Award (LoAs) to each selected bidder on May 15, 2024, marking a formal step in initiating the projects. In line with the guidelines, NTPC has also committed to a structured Power Purchase Agreement (PPA) and Power Sale Agreement (PSA) to ensure a stable framework for electricity supply and revenue. The PSAs are set to be finalized with various distribution companies or state utilities, after which NTPC will conclude PPAs with the chosen companies. This arrangement not only supports the goal of consistent energy supply but also aligns with NTPC’s role as an intermediary procurer in the renewable energy market.

The CERC, after careful examination, confirmed that the bidding and tariff discovery process adhered strictly to government guidelines, which mandate transparency and competitiveness. The evaluation committee overseeing the auction process certified that the tariffs were reasonable and aligned with the current market conditions. In their review, CERC also acknowledged NTPC’s efforts to maintain fairness and openness throughout the bidding and selection phases.

As NTPC finalizes agreements with end procurers, the regulatory body allowed the tariff adoption to proceed without the immediate necessity of finalized PPAs or PSAs, a notable adjustment made to expedite project initiation. However, the regulatory body has required NTPC to submit any future updates regarding these agreements. Furthermore, the CERC approved a trading margin of ₹0.07/kWh, with stipulations for reductions should certain financial assurances not be provided.

This decision represents a significant step in India’s renewable energy expansion, particularly in the hybrid energy segment, which integrates both solar and wind power for improved output and stability. The project not only supports India’s renewable energy targets but also promises a more resilient energy infrastructure by leveraging diversified power sources.