CERC Clears Tariff For 1200 MW Renewable Projects With Greenshoe Option Under SJVN Bidding

A recent order from the Central Electricity Regulatory Commission (CERC) has highlighted a major renewable energy initiative in India. The order, dated August 26, 2025, was issued in response to a petition filed by SJVN Limited. The petition sought the Commission’s approval for the tariff discovered through a competitive bidding process for the supply of 1,200 MW of firm and dispatchable power from renewable energy projects connected to the Inter-State Transmission System (ISTS) with integrated energy storage systems. The project also carried a “Greenshoe Option,” which allowed for an additional capacity of up to 1,200 MW.

SJVN Limited acted as an intermediary procurer and Renewable Energy Implementing Agency (REIA) on behalf of the Ministry of New and Renewable Energy. The company issued a Request for Selection (RfS) on March 27, 2024, to identify eligible power developers. The competitive bidding process followed the 2023 guidelines of the Ministry of Power and was conducted through a single-stage, two-envelope system, followed by an e-reverse auction. This ensured that the process remained transparent and in compliance with established norms.

In response to the RfS, nine bidders participated and collectively offered 2,160 MW, surpassing the initially tendered 1,200 MW. After the conclusion of the e-reverse auction, five bidders emerged successful for the initial allocation of 1,200 MW. Subsequently, SJVN extended the Greenshoe Option to these successful bidders, which permitted them to take on an additional 1,200 MW at the lowest discovered tariff. All bidders accepted this option, raising the total awarded capacity to 2400 MW.

The successful bidders and their respective capacities under the initial 1,200 MW allocation included Hero Solar Energy Private Limited with 120 MW, Ganeko One Energy Private Limited with 140 MW, Juniper Green Energy Private Limited with 200 MW, Renew Solar Power Private Limited with 150 MW, and Avaada Energy Private Limited with the largest share of 590 MW. The agreed tariff for all companies was ₹4.25 per kWh, except for Avaada Energy, which initially quoted ₹4.26 per kWh. However, for the capacity allotted under the Greenshoe Option, Avaada was also given the tariff of ₹4.25 per kWh, in line with the terms of the bidding process.

SJVN also requested the Commission’s approval for a trading margin of ₹0.07 per kWh to be charged to the buying entities. The CERC reviewed this request within the framework of the Trading Licence Regulations. The order observed that for long-term contracts, the trading margin is usually decided through mutual agreement between the trading licensee and the seller. However, in cases where back-to-back contracts do not include escrow arrangements or irrevocable, unconditional, and revolving letters of credit, the trading margin cannot exceed two paise per kWh, which amounts to ₹0.02 per kWh. In this case, the Commission concluded that SJVN would not be able to charge the higher margin of ₹0.07 per kWh.

The Commission’s order was delivered after careful examination by members Shri Ramesh Babu V., Shri Harish Dudani, and Shri Ravinder Singh Dhillon. They confirmed that the bidding process was transparent and aligned with Section 63 of the Electricity Act, 2003. SJVN also provided a certificate from the bid evaluation committee confirming that the process complied fully with the guidelines. The Commission has now adopted the discovered tariffs for the projects, including the additional capacity under the Greenshoe Option.

SJVN has already signed Power Sale Agreements (PSAs) with Uttar Pradesh Power Corporation Limited (UPPCL) for 1,200 MW of power from the successful bidders. During the hearing, SJVN also confirmed that it would submit the remaining agreements as soon as they are executed. This order marks an important milestone for renewable energy expansion in India, ensuring large-scale integration of renewable power with storage into the national grid.