CERC Approves Tariffs For 2170 MW ISTS Solar Projects With Greenshoe Expansion

The Central Electricity Regulatory Commission (CERC) has issued an order adopting tariffs for 1200 MW of Inter-State Transmission System (ISTS) connected solar power projects, along with an additional capacity under a “Greenshoe Option.” The petition was filed by NHPC Limited under Section 63 of the Electricity Act, 2003, aiming to support solar capacity addition and help Distribution Companies (DISCOMs) meet their Renewable Purchase Obligations.

NHPC, acting as a Renewable Energy Implementing Agency, initiated the bidding process in October 2024 through an international competitive bidding route. The process included technical evaluations followed by an e-reverse auction conducted in January 2025. Initially, five bidders were selected for a base capacity of 1200 MW. However, Bharat Petroleum Corporation Limited was later disqualified as its 30 MW bid did not meet the minimum requirement of 50 MW. This reduced the final allocated base capacity to 1170 MW.

The final allocation saw Teerth Gopicon Limited securing 70 MW at a tariff of ₹2.43 per kWh, while Hanur Solar Power Private Limited was awarded 200 MW at ₹2.46 per kWh. ReNew Solar Power Private Limited secured 300 MW at ₹2.47 per kWh, and Avaada Energy Private Limited received the largest share of 600 MW at the same tariff of ₹2.47 per kWh. These tariffs reflect competitive pricing discovered through the transparent bidding mechanism.

A key highlight of the tender was the introduction of the “Greenshoe Option,” which allowed additional capacity to be allocated at the lowest discovered tariff of ₹2.43 per kWh. Under this provision, Hanur Solar Power was awarded an extra 400 MW, and ReNew Solar Power received an additional 600 MW. This increased the total approved project capacity to 2170 MW.

During the proceedings, the Commission raised concerns regarding the Greenshoe Option, noting that it is not explicitly mentioned in standard government bidding guidelines. NHPC clarified that although the guidelines do not specifically include such a provision, they also do not prohibit it. The agency explained that this flexibility helps Renewable Energy Implementing Agencies adjust bid capacities to meet annual targets efficiently.

NHPC further highlighted that the discovered tariffs are lower than those approved in similar recent cases, ensuring rate reasonability and providing cost benefits to consumers. The Commission acknowledged this and proceeded with the tariff adoption.

The order also addressed the trading margin applicable to NHPC. As per the Power Sale Agreements, NHPC is entitled to a trading margin of ₹0.07 per kWh. However, this margin will be reduced to ₹0.02 per kWh if NHPC fails to provide adequate payment security mechanisms, such as an escrow arrangement or a letter of credit, for the benefit of power generators.

The solar power projects awarded under this tender are expected to be commissioned by the financial year 2027-28, contributing significantly to India’s renewable energy targets and strengthening the country’s clean energy transition.