CERC Approves NTPC’s Usage Charges For 1.99 GW Solar PV Project Under CPSU Scheme Phase-II

The Central Electricity Regulatory Commission (CERC) recently issued an order in a petition filed by NTPC Limited and NTPC Renewable Energy Limited. The petition sought the adoption of usage charges for a 1,990 MW Solar Photovoltaic Power Station under the Central Public Sector Undertaking (CPSU) Scheme Phase-II. This scheme, introduced by the Ministry of New and Renewable Energy (MNRE) in 2019, aimed to establish grid-connected solar PV projects using Viability Gap Funding (VGF).

The CPSU Scheme Phase II outlined guidelines for selecting solar power developers through a transparent competitive bidding process. NTPC’s petition followed a similar framework, requesting approval for usage charges determined through this method. NTPC secured a Letter of Award (LoA) for 1,990 MW capacity after bidding conducted by the Indian Renewable Energy Development Agency Limited (IREDA).

The bid process saw participation from various government producers, and NTPC emerged as a successful bidder. The project allocation included 735 MW executed by NTPC directly and 1,255 MW by NTPC Renewable Energy Limited, its wholly-owned subsidiary. Following this, NTPC signed Power Usage Agreements (PUAs) with multiple entities, including Telangana Discoms, Damodar Valley Corporation, and Madhya Pradesh Power Management Company.

The CERC evaluated the petition in light of the CPSU Scheme’s provisions and the Electricity Act, 2003. Notable aspects included adherence to bidding guidelines, allocation of VGF, and pre-determined ceiling usage charges. The Commission observed that the bidding process was conducted transparently, aligning with the standard guidelines issued by the Ministry of Power.

While NTPC’s petition sought the adoption of usage charges at ₹2.57/kWh due to revised GST rates, the Commission emphasized adherence to the parameters established during bidding, specifically ₹2.45/kWh. Any changes post-bidding, it noted, must stem from “Change in Law” provisions under the PUAs. As an interim relief, the Commission allowed provisional compensation for increased charges pending a separate petition for final approval.

This decision underscores the importance of competitive bidding and adherence to established guidelines in renewable energy projects. It also highlights the role of regulatory bodies in ensuring fair processes and compliance with legal frameworks.