CERC to Grant Electricity Trading License to NTPC to Expedite Solar and Wind Projects

NTPC has set a target of achieving 32 GW of renewable energy-based capacity by 2032 out of which 30 GW will be solar PV


The Central Electricity Regulatory Commission (CERC) has proposed to grant the National Thermal Power Corporation (NTPC) electricity trading license in India. The license is to be granted to help the NTPC in implementing renewable energy projects, especially solar and wind energy projects across the country.

NTPC had petitioned the CERC seeking a grant of Category `I` license for inter-state trading in electricity in all states and Union Territories of India. In its petition, NTPC had submitted that it had been asked by the Ministry of New and Renewable Energy (MNRE) to implement 15 GW of solar PV projects.

NTPC had expressed that trading license would help in setting up this capacity. NTPC had stated that being an intermediary procurer, NTPC would be required to aggregate the solar power purchased from different solar power generators and sell it to the distribution licensee/company (DISCOM). In such cases, the intermediary procurer will be playing the role of a trader, namely buying power from the developers and selling the same to one or more DISCOM.

After going through submissions made as part of the petition, CERC observed that NTPC had set a target of achieving 32 GW of renewable energy-based capacity by 2032 out of which 30 GW is expected to be solar PV. Under the initiative of MNRE for procurement of 20,000 MW, NTPC has been identified as the nodal agency. As part of this plan, NTPC has selected the wind/solar power project developers for implementation of wind/solar PV projects and procurement of cumulative capacity of 1,150 MW wind power and 2,000 MW solar PV.

NTPCs presence as an intermediary agency has led to the assurance of timely payment to renewable energy developers, which has resulted in low tariffs for wind and solar projects.

CERC also observed that the NTPC is a Maharatna Central Public Sector Enterprise (CPSE). It is implicit that NTPC has a very strong balance sheet and has the trust of shareholders. The creditworthiness of NTPC has also been recognized by various credit rating agencies.

As a result, CERC is of the view that even though NTPC does not meet the current ratio and liquidity ratio criteria, it is financially sound with regard to liquidity for carrying out electricity trade. NTPC meets other criteria for grant of trading license as required under the ‘Trading License Regulations.’

Keeping in view the policy of the Government of India for promoting renewable energy, the CERC relaxed the current ratio and liquidity ratio requirement in public interest and proposes to grant Category-I trading license to NTPC and has directed to invite further suggestions or objections to this proposal of the Commission.

According to Mercom’s India Solar PV Project Tracker, NTPC has 873 MW of solar PV projects under operation and 268 MW of solar PV project under various stages of development.

Recently, CERC issued draft regulations for Power System Development Fund to enable fast-paced development of transmission infrastructure in the country.