DERC Approves NDMC’s 200 MW Solar Power Procurement To Boost Renewable Energy Targets

The Delhi Electricity Regulatory Commission (DERC) has recently approved the New Delhi Municipal Council (NDMC)’s petition to procure 200 MW of solar power. The decision, issued on November 21, 2025, allows NDMC to enter into a long-term Power Supply Agreement (PSA) with the Solar Energy Corporation of India (SECI) for 25 years. The approved tariff for this project is Rs. 2.61 per unit, along with an additional Rs. 0.07 per unit as SECI’s trading margin.

The key issue in this procurement was NDMC’s decision to select a slightly higher-priced bidder, Avaada GJ Sustainable Private Ltd., at ₹2.61 per unit, instead of the lowest bidder offering ₹2.60 per unit under the ISTS Solar Tranche-XI auction. NDMC explained that this decision was based on the urgency to meet its Renewable Purchase Obligation (RPO) targets and to address the rising energy demand, especially during the summer months. The selected L-2 project offered a faster commissioning timeline compared to the L-1 bidders, which was a critical factor for NDMC.

Initially, the L-2 project’s Scheduled Commissioning Date (SCD) was set for March 24, 2026, after delays in signing the PSA from February to September 2024. However, the project is reportedly progressing ahead of schedule, with commissioning now expected by November 2025. This accelerated timeline is seen as crucial in ensuring timely availability of power for NDMC and in meeting its renewable energy commitments.

In contrast, the projects offering the L-1 tariff of ₹2.60 per unit faced uncertainties regarding connectivity and delayed commissioning timelines. The required Central Transmission Utility (CTU) substations for these projects were expected to be operational only between August and November 2026, which would have pushed back the project completion significantly.

The DERC also highlighted another important financial consideration related to transmission charges, as per Central Electricity Regulatory Commission (CERC) regulations. Solar projects commissioned after June 2026 face higher transmission charges, starting at 50% for June 2026 to June 2027, increasing to 75% and 100% in the following years. The L-2 project, with its accelerated November 2025 commissioning schedule, is expected to incur only 25% transmission charges. On the other hand, the L-1 projects, due to their later commissioning, would be liable for higher charges, making them comparatively more expensive in the long term.

Considering these factors, the Commission concluded that procuring power from the L-2 bidder is more economical over time, taking into account both cost savings from lower transmission charges and the advantage of meeting RPO targets sooner. The approval also aligns with NDMC’s vision of becoming a 100% Renewable and Green Municipality.

The order reflects the regulatory body’s recognition that in certain cases, factors beyond the per-unit tariff, such as project timelines and long-term transmission costs, play a significant role in determining the most economically viable option. By allowing NDMC to move forward with the L-2 project, the DERC has ensured that the city can access clean energy promptly while minimizing future financial burdens. The approval marks an important step in supporting renewable energy growth in Delhi and demonstrates the city’s commitment to sustainability and green energy initiatives.

This decision also emphasizes the broader trend of prioritizing timely renewable energy procurement, ensuring that urban local bodies like NDMC can meet regulatory obligations and contribute to India’s renewable energy targets. The collaboration with SECI and the strategic selection of projects that balance cost, timeline, and regulatory benefits serve as a model for similar initiatives across the country.

The NDMC’s 200MW solar procurement, now officially approved, is expected to strengthen Delhi’s renewable energy portfolio, enhance grid stability, and support the city’s transition toward a greener and more sustainable future.