The Central Electricity Regulatory Commission (CERC) has adopted tariffs of ₹3.32 (~$0.035)/kWh and ₹3.33 (~$0.036)/kWh for SJVN’s 1.2 GW of interstate transmission system (ISTS)-connected solar power projects with 600 MW/2.4 GWh energy storage systems.

It also ruled that the trading margin will be governed by regulatory provisions, with a cap of ₹0.02 (~$0.0002)/kWh applicable in the absence of adequate payment security mechanisms, even though SJVN had sought approval for ₹0.07 (~$0.0007)/kWh.

Background

SJVN floated the tender in August 2024 and received bids for a cumulative capacity of 4.88 GW against the offered 1.2 GW, reflecting significant oversubscription.

In the e-reverse auction, six developers –SAEL Industries (150 MW), Jindal India Renewable Energy (300 MW), Sembcorp Green (150 MW), JBM Renewables (150 MW), Fastnote Biofuels (100 MW), and Reliance NU Energies (350 MW), were declared winners, with tariffs ranging from ₹3.32 (~$0.035)/kWh to ₹3.33 (~$0.036)/kWh.

SJVN argued that the process fully complied with government guidelines and resulted in competitive tariffs compared with similar tenders by SECI and NHPC.

SJVN also requested the Commission to approve a trading margin of ₹0.07 (~$0.0007)/kWh to be paid by the distribution companies.

Commission’s Analysis

The Commission observed that the tendering, bid evaluation, and e-reverse auction were conducted in accordance with the prescribed bidding guidelines.

The Commission noted that the high level of participation indicated strong market confidence and ensured efficient price discovery.

It further compared the discovered tariffs with other bids, noting that SJVN’s tariffs for 4-hour storage projects were lower than SECI’s similar tender and aligned with NHPC’s lower tariffs for shorter-duration storage.

CERC concluded that the tariffs were fair and allowed the process to proceed without waiting for complete tie-up of power sale agreements, while clarifying the applicable framework for trading margins.

The Commission noted that  in the event of SJVN’s failure to provide an escrow arrangement or an irrevocable, unconditional, and revolving letter of credit to the solar power generators, the trading margin should not exceed ₹0.02 (~$0.0002)/kWh.

Recently, CERC approved tariffs of ₹2.86 (~$0.0304)/kWh and ₹2.87 (~$0.0305)/kWh, discovered by the Solar Energy Corporation of India, for 2,000 MW of solar projects coupled with 1 GW/4 GWh of energy storage systems (Tranche XX).

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