CERC Approves Project-Specific Tariff For 40 MW NTPC Solar Plant In Ayodhya

In a significant step toward expanding solar energy in Ayodhya, the Central Electricity Regulatory Commission (CERC) has approved the project-specific tariff for a 40 MW solar photovoltaic plant developed by NTPC Green Energy Limited, a subsidiary of NTPC Limited. The project forms part of a 2023 Memorandum of Understanding between NTPC and the Government of Uttar Pradesh to establish 300 MW of solar capacity in the city.

The solar project was implemented in two phases. The first 14 MW became operational on January 27, 2024, while the remaining 26 MW was commissioned on July 31, 2024. Since the final commissioning occurred after the notification of the updated 2024 national Renewable Energy (RE) Tariff Regulations in June 2024, CERC determined the tariff under these revised rules.

The determination of the tariff involved detailed scrutiny of project costs. NTPC Green Energy initially proposed a higher tariff of ₹3.94 per unit, citing several site-specific challenges. The company highlighted that Ayodhya experiences lower solar irradiance compared to states like Rajasthan, which impacts energy generation. Additionally, the site’s location on submerged land necessitated elevated foundations and other civil engineering measures to prevent flooding, further raising costs. On the other hand, the Uttar Pradesh Power Corporation Ltd. (UPPCL) suggested a lower tariff of ₹3.67 per unit, questioning the justification for some of the expenses claimed by the developer.

After careful evaluation, CERC approved a total project cost of about ₹201.45 crore, which works out to approximately ₹503.62 lakh per MW. This includes the cost of a dedicated transmission line connecting the plant to the Darshan Nagar substation. The Commission also recognized ₹20.71 lakh as compensation for the reallocation of local families, considering it a necessary expense for land acquisition. However, it revised the Interest During Construction to ₹16.10 lakh per MW and standardized operation and maintenance costs at ₹3.63 lakh per MW for the first three years, with an annual escalation of 5.25% thereafter.

CERC ultimately approved a levelized tariff for the 25-year life of the plant. The decision reflects a balance between allowing the developer to recover unique site-specific costs and ensuring that the electricity generated remains affordable for the state’s power grid. The project marks a major milestone in Ayodhya’s solar energy expansion and demonstrates the commitment of both NTPC and the Uttar Pradesh government to promoting renewable energy while addressing local technical and environmental challenges.

This project not only contributes to clean energy generation in the region but also strengthens the state’s renewable energy infrastructure, setting a precedent for future solar development in areas with similar geographical and environmental constraints.