The Bihar Electricity Regulatory Commission (BERC) has approved tariff and the power purchase agreement between the Bihar Renewable Energy Development Agency (BREDA) and SJVN Limited for procuring 200 MW of solar energy at ₹3.11 (~$0.042)/kWh.

Earlier, BREDA filed a petition for the approval to procure 250 MW of solar power from grid-connected ground-mounted solar projects to be set up in the state and for the draft power purchase agreement (PPA) to be signed by distribution companies (DISCOMs) and the successful bidders.

Background

BREDA had reissued the tender to procure 250 MW of electricity from grid-connected solar energy projects to meet its renewable purchase obligations (RPO). SJVN Limited secured 200 MW capacity quoting ₹3.11 (~$0.042) in the open competitive tariff bidding process. Avaada Energy quoted 100 MW capacity at a tariff of ₹3.20 (~$0.043)/kWh.

The Commission has set the following RPO targets for the period starting financial year (FY) 2019-20 to FY 2021-22 for the state DISCOM.

Bihar State Power Holding Company Limited (BSHPCL) had consented to procure the generated solar power from the yet to be set up 250 MW of solar projects on tariff approved by the Commission to meet its solar RPO target.

BREDA recommended and requested BSPHCL to purchase 200 MW of solar energy at ₹3.11 (~$0.042) and another 100 MW at ₹3.20 (~$0.043), subject to the approval from BERC for purchasing 300 MW of solar instead of the proposed 250 MW.

Therefore, BREDA requested the Commission to approve the purchase of 300 MW of solar power for 25 years and grant regulatory approval to procure 200 MW of solar energy at ₹3.11 (~$0.042)/kWh and 100 MW at ₹3.20 (~$0.043)/kWh.

Alternatively, the Commission could approve 200 MW of solar power at ₹3.11 (~$0.043)/kWh and another 50 MW of solar energy at ₹3.20 (~$0.043)/kWh.

In its petition, BREDA informed the Commission that SJVN Limited requested to install the balance 50 MW capacity at ₹3.11 (~$0.043)/kWh to provide cheaper power to consumers in Bihar.

However, DISCOM revised its consent from 250 MW to 200 MW for BREDA as the tariff quoted by Avaada Energy is higher than the ceiling tariff band of ₹3.05 (~$0.041)/kWh to ₹3.15 (~$0.042)/kWh provided by the Commission.

Commission’s analysis 

The Commission took cognizance of the multi-year tariff filed by DISCOMs. The multi-year tariff calculated combined energy consumption and solar RPO targets for both DISCOMs considering the RPO trajectory of existing FY 2021-22 targets.

The state regulator had not specified RPO targets by FY 2021-22, and there would be a shortage of solar power against the solar RPO targets for FY 2022-23 to FY 2024-25.

Therefore, the Commission noted that BREDA’s procurement of 250 MW of solar energy is required to fulfill DISCOMs solar RPO.

The Commission said the total capacity specified in the tender is 250 MW. Therefore, it should not be changed to 300 MW after bidding as it may restrict the adequate level of competition and be detrimental to the interest of the prospective bidder.

The state regulator noted that the Bihar State Power Holding Company revised its consent from 250 MW to 200 MW for BREDA.

Therefore, the Commission approved the PPA with the direction to re-examine and list out all the left-out errors, if any, and make relevant changes in the draft PPA before the execution. It approved the purchase of 200 MW of solar power on long term basis for 25 years at discovered tariff of ₹3.11 (~$0.043)/kWh from SJVN.

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Harsh Shukla is a staff reporter at Mercom India. Previously with Indian Express, he has covered general interest stories. He holds a Masters Degree in Journalism from Symbiosis Institute of Media and Communication, Pune.

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