CERC Approves Usage Charges For NLC India’s 510 MW Solar Project Under CPSU Phase-II

The Central Electricity Regulatory Commission (CERC) has recently approved the final usage charges for a 510 MW solar power project developed by NLC India Limited. This project is part of the Central Power Sector Undertaking (CPSU) Scheme Phase-II, a government initiative aiming to establish 12,000 MW of solar capacity through public sector producers. The scheme focuses on promoting solar energy development while supporting domestic manufacturing of solar cells and modules.

The 510 MW project is connected to the Inter-State Transmission System (ISTS) and was awarded to NLC India through a competitive bidding process managed by the Indian Renewable Energy Development Agency (IREDA). Under the CPSU Scheme Phase-II, successful government producers are eligible for Viability Gap Funding (VGF), which helps offset the additional costs of using domestically manufactured solar components. NLC India emerged as a successful bidder after quoting a VGF of approximately ₹44.75 lakh per megawatt, reflecting a transparent and competitive selection process.

Initially, the ceiling for usage charges was set at ₹3.50 per unit. However, after several revisions and government notifications, the final usage charge for this project was determined to be ₹2.57 per kilowatt-hour (kWh). These charges are payable by government entities or distribution companies (DISCOMs) that procure the solar power, and they do not include other costs such as transmission charges. The decision aligns with the Electricity Act, 2003, ensuring that the bidding and tariff-setting process remains fair and competitive.

NLC India has already signed Power Usage Agreements (PUAs) to supply 300 MW of solar power to Rajasthan and 200 MW to Telangana, with the remaining 10 MW reserved for the company’s own consumption. State regulators in Rajasthan have approved the agreements, and the final adoption of usage charges by CERC now allows these arrangements to proceed.

During its review, CERC focused on ensuring transparency and adherence to government guidelines throughout the bidding process. Although there were procedural delays, including instances where IREDA failed to appear during hearings, the necessary documents were eventually submitted, allowing the Commission to finalize its decision.

With the approval of usage charges, the project is set to move forward toward commissioning, with the deadline extended to March 31, 2025, to accommodate various implementation challenges. The project represents a significant step toward India’s national solar targets and contributes to the government’s goal of achieving 100 GW of solar capacity. It also reinforces support for the domestic solar manufacturing industry, highlighting the government’s commitment to building a self-reliant renewable energy sector.

By finalizing the usage charges and supporting the CPSU Phase-II initiative, the project not only promotes clean energy generation but also strengthens the framework for government-led solar development, providing a model for future large-scale renewable energy projects in India.