RERC Rejects 500 MW RTC Power Proposal, Approves 160 MW To Balance Grid Stability And Consumer Costs In Rajasthan

The Rajasthan Electricity Regulatory Commission (RERC) has passed an important order on Rajasthan’s power procurement strategy, focusing on grid safety while protecting consumer interests. The order was issued in a petition filed by Rajasthan Urja Vikas and IT Services Limited (RUVITL), which had sought approval to procure 500 MW of Round-the-Clock (RTC) power for a period of five years.

RUVITL approached the Commission, citing a growing power deficit in the state. Based on studies by the Energy Assessment Committee and the Central Electricity Authority, Rajasthan is expected to face a rising base-load shortage in the coming years. As per these projections, the cumulative deficit could cross 1,000 MW by the financial year 2025-26 and may go beyond 5,000 MW by 2029-30. To address this expected shortfall, RUVITL proposed a fuel-agnostic bidding process. This meant that power could be sourced from thermal plants, renewable energy projects, or hybrid combinations, depending on what was most suitable and competitive.

The proposal, however, faced strong opposition from several stakeholders. Many argued that Rajasthan’s power deficit is not uniform throughout the year but is largely seasonal. According to them, demand peaks during winter months and during certain hours of the day, while for the rest of the year, the requirement is much lower. Stakeholders warned that procuring 500 MW of RTC power for all 12 months could lead to underutilization. In such a situation, the state might be forced to sell surplus power at lower prices or pay fixed charges even when the power is not required. This, they said, would eventually increase electricity tariffs for consumers.

Several alternatives were suggested during the proceedings. These included using battery energy storage systems to manage peak demand, entering into seasonal or short-term contracts instead of long-term RTC arrangements, and improving the scheduling and efficiency of existing state-owned power plants. Stakeholders stressed that careful planning was needed to avoid unnecessary financial pressure on consumers.

After examining all submissions, the Commission took a balanced view. It recognized that Rajasthan has a very high renewable energy capacity, especially solar and wind. While this supports clean energy goals, it also creates challenges because such power is intermittent. The Commission noted that firm and dispatchable power is necessary to maintain grid stability, particularly during periods of stress. Past instances were cited where grid frequency dropped to unsafe levels, highlighting the need for reliable backup power.

At the same time, the Commission agreed that approving a full 500 MW RTC contract was not justified, given the seasonal nature of the deficit. Instead, RERC decided to maintain its earlier approval for the procurement of 160 MW of RTC power. This level was considered adequate to provide basic grid support without placing an excessive cost burden on consumers.

In its final decision, the Commission rejected the request for 500 MW and directed the Discoms to move ahead with the already approved 160 MW procurement under existing terms. It also clarified that future proposals would be considered only if supported by detailed studies, especially showing the impact on consumer tariffs and addressing seasonal or peak-specific requirements.