The Solar Energy Corporation of India (SECI) filed a petition under Section 63 of the Electricity Act, 2003, seeking approval from CERC for the tariff of 630 MW of firm and dispatchable power from renewable energy projects connected to the Inter-State Transmission System (ISTS). The petition also requested approval of a trading margin of ₹0.07 per kWh to be paid by the distribution companies as per the guidelines issued by the Ministry of Power.
SECI, acting as the Renewable Energy Implementing Agency, initiated the bidding process following the guidelines notified on June 9, 2023, by the Ministry of Power. The objective was to procure renewable energy with energy storage to ensure firm and dispatchable power supply. The process involved a tariff-based competitive bidding system, and SECI issued a Request for Selection (RfS) on June 9, 2023, for 1,260 MW of renewable energy projects. However, an amendment reduced the capacity to 630 MW.
The competitive bidding process received five bids totaling 780 MW, of which 630 MW were awarded to five companies: Vena Energy Aura Private Limited, Hero Solar Energy Private Limited, JSW Neo Energy Limited, Hexa Climate Solutions Private Limited, and Serentica Renewables India 11 Private Limited. The final tariffs discovered in the auction ranged from Rs. 4.98 per kWh to Rs. 4.99 per kWh. The power is designated for sale to BSES Rajdhani Power Limited (BRPL), BSES Yamuna Power Limited (BYPL), and GIFT Power Company Limited (GIFT PCL).
The petition stated that the selection process was conducted transparently and adhered to the guidelines. SECI issued Letters of Award (LoAs) to the selected bidders on August 7, 2024, following the acceptance of the discovered tariff by the buying entities. However, BRPL and BYPL had not signed the Power Sale Agreements (PSAs), prompting SECI to seek alternative distribution utilities for the allocated capacity.
The Commission reviewed the petition and verified that the bidding process was conducted as per the guidelines. It noted that the discovered tariff was reasonable and aligned with market trends. The Commission, therefore, approved the adoption of the tariff for the 630 MW projects, subject to SECI securing agreements for the awarded capacity.
Additionally, SECI’s request for a trading margin of ₹0.07 per kWh was considered in line with the Trading Licence Regulations. However, it was stated that if SECI fails to provide an escrow arrangement or irrevocable letter of credit, the trading margin would be capped at Rs. 0.02 per kWh.
The order emphasized compliance with payment security mechanisms, including the requirement for a revolving letter of credit equivalent to 110% of the estimated monthly billing. It also outlined provisions related to payment terms, dispute resolution, and penalties for delays in project implementation.
The decision reinforces the government’s commitment to firm and dispatchable renewable power procurement. It also highlights the importance of energy storage in ensuring reliability and grid stability. With this approval, SECI will continue its role as an intermediary, facilitating renewable energy adoption and ensuring long-term power supply agreements with distribution companies.
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