The Central Electricity Regulatory Commission (CERC) has adopted tariffs of ₹2.68 (~$0.0287)/kWh and ₹2.69 (~$0.0288)/kWh for NTPC’s 1,500 MW of interstate transmission system (ISTS)-connected projects.

The Commission ruled that the adoption of tariff is subject to NTPC entering into power purchase agreements (PPAs) with the selected generators and power sale agreements (PSAs) with distribution utilities, and directed the company to place these agreements on record.

It allowed a trading margin of ₹0.07 (~$0.00075)/kWh if mutually agreed under PSAs but capped it at ₹0.02 (~$0.00021)/kWh in cases where payment security mechanisms, such as escrow arrangements or letters of credit, are not provided.

Background

NTPC approached the Commission seeking adoption of tariffs discovered through a bidding process for the procurement of power from 1,500 MW of solar projects, in which it acts as an intermediary procurer to facilitate the supply of renewable energy to distribution companies for meeting renewable purchase obligations (RPOs).

The request for selection (RfS) attracted five bidders, with a cumulative bid capacity of 2,100 MW.

Initial financial bids placed Avaada Energy as the lowest bidder at ₹2.69 (~$0.0288)/kWh, followed by Apraava at ₹2.70 (~$0.0289)/kWh, Illuminate Hybren at ₹2.72 (~$0.0291)/kWh, JSW at ₹2.75 (~$0.0294)/kWh, and Renew at ₹2.82 (~$0.0301)/kWh. Post-auction, tariffs were reduced to a range of ₹2.68 (~$0.0287)/kWh ₹2.69 (~$0.0288)/kWh, and capacity allocation was carried out using the bucket-filling methodology, resulting in a final award of 1,500 MW.

NTPC submitted that the bidding process adhered strictly to MoP guidelines, ensured transparency and competition, and achieved tariffs comparable to recent benchmarks.

Commission’s Analysis

The Commission assessed compliance with Section 63 requirements, which mandate tariff adoption is discovered through a transparent competitive bidding process conducted in accordance with government guidelines.

It  also confirmed that the e-reverse auction was conducted in accordance with the RfS provisions and noted adequate competition, as evidenced by five bidders and a total bid capacity exceeding the tendered capacity.

Upon reviewing market comparisons, previous Commission orders, competitive bidding outcomes, and the Bid Evaluation Committee’s conformity certificate, the Commission concluded that the tariffs were aligned with prevailing market conditions and had been competitively discovered.

It held that the bidding process was transparent and that sufficient participation ensured fair price discovery.

Recently, CERC approved tariffs of ₹3.41 (~$0.036)/kWh and ₹3.42 (~$0.037)/kWh for NHPC’s 1.2 GW of interstate transmission system (ISTS)-connected wind-solar hybrid power projects with a greenshoe option.

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