Himachal Pradesh Advances Clean Energy Goals With Approval For 550 MW Solar Power Procurement

The Himachal Pradesh Electricity Regulatory Commission (HPERC) recently deliberated on a petition submitted by the Himachal Pradesh State Electricity Board Limited (HPSEBL). This petition sought approval for the procurement of 550 MW of solar photovoltaic power from the Solar Energy Corporation of India Limited (SECI). Filed under sections 86(1)(b) and 86(1)(e) of the Electricity Act, 2003, and relevant provisions of the HPERC (Conduct of Business) Regulations, 2024, the petition highlights HPSEBL’s commitment to meeting its renewable energy obligations and advancing the state’s energy sustainability goals.

HPSEBL, a key player in the state’s electricity distribution, proposed to purchase this power as part of the Inter-State Transmission System (ISTS)-connected solar power projects under Tranche-XIII. SECI, recognized as a Renewable Energy Implementing Agency by the Ministry of New and Renewable Energy, Government of India, will oversee the power supply based on a competitive tariff rate of ₹2.56 per kWh, along with an additional trading margin of ₹0.07 per kWh.

The power purchase aims to fulfill HPSEBL’s long-term energy requirements and aligns with the Resource Adequacy Planning Framework notified by the Ministry of Power. This framework advises distribution licensees to secure a significant portion of their power needs through long-term contracts, ensuring reliability and sustainability in power distribution. In line with this directive, HPSEBL has drafted a 10-year resource adequacy plan extending up to 2034-35, with plans to procure 3,000 MW of solar or hybrid power.

The petition underscored the selection of SECI’s offer as the most suitable among various proposals from renewable energy agencies. The agreement includes a 25-year tenure for power procurement, ensuring consistent energy availability at a competitive rate. The tariff rates were determined through a transparent bidding process, consistent with the “Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Solar Power Projects” issued by the Ministry of Power.

HPERC, upon reviewing the petition, acknowledged the growing power demand within the state and the gap between supply and demand. The commission emphasized the importance of renewable energy in bridging this gap and promoting Himachal Pradesh as a green energy state, consistent with the HP Energy Policy, 2021. It noted that renewable energy procurement is not only a legal obligation under Section 86(1)(e) of the Electricity Act but also a strategic move to reduce dependency on fossil fuels.

After thorough analysis, the commission approved the procurement under specified conditions. These include adherence to the agreed tariff rates and trading margins, provision of financial security mechanisms by SECI, and safeguards to ensure the benefit of any future reductions in trading margins are passed on to HPSEBL. Additionally, developers must bear certain transmission charges in case of project delays.

This decision reinforces HPSEBL’s commitment to renewable energy and reflects HPERC’s proactive stance in facilitating clean energy initiatives. It sets a benchmark for other states, emphasizing the role of transparent processes and strategic planning in achieving energy security and sustainability.