The Central Electricity Regulatory Commission (CERC) on November 27, 2025, issued an order regarding Petition No. 254/AT/2025 filed by NTPC Limited. The petition sought the adoption of the tariff discovered through a competitive bidding process for the procurement of 760 MW of firm and dispatchable power from ISTS-connected renewable energy projects, including those with energy storage systems. The bidding process was conducted according to the Ministry of Power’s Guidelines for Tariff-Based Competitive Bidding. CERC’s role was to consider the petition and formally adopt the discovered tariff under Section 63 of the Electricity Act, 2003, making it binding.
A key focus of the order was the trading margin that NTPC, acting as a Trading Licensee, is entitled to charge. While regulations generally define limits on the trading margin, the Commission highlighted exceptions under Regulation 8(1)(d) and Regulation 8(1)(f) of the Trading Licence Regulations. These exceptions are relevant in cases where NTPC does not provide an irrevocable, unconditional, and revolving Letter of Credit or an escrow arrangement in favor of the renewable energy generators, specifically wind-solar hybrid power producers.
The Commission noted that Power Sale Agreements (PSAs) have not yet been signed by the distribution licensees that will purchase the power. Once these PSAs are executed between NTPC and the respective DISCOMs, the trading margin to be charged by NTPC will be determined according to the provisions of the PSAs.
In a significant protective measure for the power generators, CERC specified that if NTPC fails to provide the required financial security, either through an escrow arrangement or a revolving Letter of Credit, the trading margin would be capped at ₹0.02 per unit. This ceiling, defined in the Trading Licence Regulations, serves as a default limit in the absence of the mandated financial security. The move ensures that renewable energy developers are not disadvantaged due to any shortfall in financial guarantees from the trading intermediary.
The order provides clarity on how NTPC can recover its trading margin while balancing the interests of renewable energy generators. By setting a clear ceiling on the margin in cases of non-provision of security, CERC has provided a safeguard for developers while allowing the trading intermediary to operate within regulatory limits.
With these clarifications, CERC confirmed the framework for implementing the competitively bid renewable energy capacity. The adoption of the tariff and subsequent signing of the PPAs and PSAs can now proceed. This step is significant for ensuring that the power from the 760 MW of renewable energy projects, including those with energy storage systems, can be effectively procured and integrated into the grid.
The disposal of Petition No. 254/AT/2025 under these terms paves the way for the smooth execution of power purchase agreements while maintaining financial assurance for developers. The Commission’s order effectively balances commercial interests with regulatory safeguards, supporting the growth of renewable energy in the country. It also emphasizes the importance of financial security in trading arrangements and sets a clear precedent for future projects involving trading intermediaries and renewable energy generators.
This decision is expected to facilitate the timely adoption of tariffs and strengthen confidence among developers and distribution utilities, ensuring that renewable energy projects are implemented efficiently and contribute to the nation’s energy transition goals.
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