The Central Electricity Regulatory Commission (CERC) has rejected Calcutta Electric Supply Corporation’s (CESCL) petition for approval of a tariff for 300 MW wind-solar hybrid power projects.

The Commission noted that the petitioner failed to seek permission from the West Bengal government to deviate from the bidding guidelines for interstate transmission system (ISTS) projects. It had instead sought permission from a different state government.

The petitioner had sought permission to award the entire capacity to a single bidder in contravention of the hybrid bidding guidelines.

The Commission was also not convinced by the petitioner’s justification for a higher tariff of ₹3.81 ($0.044)/kWh and the transparency of its bidding process.

Background

CESCL floated a tender to set up 150 MW wind-solar hybrid power projects in Mandsaur, Madhya Pradesh, along with an additional greenshoe option of 150 MW in August 2024.

The company received three bids for an aggregate capacity of 250 MW. After exercising the greenshoe option to provide additional capacity, the petitioner awarded the entire 300 MW capacity at a tariff of ₹3.81 (~$0.044)/kWh to Purvah Green Power.

While addressing the issue of the high tariff awarded to Purvah, the CESCL’s bid evaluation committee noted that Purvah stipulated a completion time of 20 months instead of 24 months, which could save ₹0.02 (~$0.00023)/kWh.

The committee said the petitioner had highlighted a 50% minimum capacity utilization factor (CUF) for the project, compared to a CUF of 30%, which is the minimum requirement set by renewable energy implementing agencies.

It noted that a hybrid power project supplying power with a higher CUF of 50% could lower the Central Transmission Utility of India charges imposed on the project developer.

The bid evaluation committee justified the tariffs stating that ₹3.81 (~$0.044)/kWh was lower than the tariff discovered for hybrid power projects with lower CUF.

It noted that the tariff discovered was lower than the cost of procuring power from a hybrid project with a CUF of 30%. The tariff was also lower than the cost of meeting the remaining 20% by procuring power under the Green-Day Ahead Market (G-DAM).

CESCL approached the West Bengal government to seek permission to deviate from the guidelines and award the entire project capacity to Purvah Green. The petitioner was granted permission from the state government to award the entire capacity to Purvah.

It then approached the Commission to obtain approval for the tariff on the 300 MW wind-solar power projects.

Commission’s Analysis

The Central Commission stated that the petitioner’s projects are interstate hybrid power projects serving consumers in Madhya Pradesh and West Bengal. However, it failed to seek permission from the central government.

It also highlighted that the petitioner concealed the fact that the projects were ISTS projects while seeking permission from the state government to deviate from the bidding guidelines for hybrid power.

The Commission pointed out that the petitioner was also informed about seeking permission from the appropriate government during one of the hearings.

It said CESCL awarded the project capacity in contravention of the bidding guidelines.

It also questioned the transparency of the bidding process, as the winning bidder, Purvah Green Power, is a subsidiary of CESCL.

The Commission was also not satisfied with CESCL’s justification for the higher tariff. It noted that CESCL’s clarification that an additional CUF could lead to an increase in tariff of up to ₹0.38 (~$0.0044)/kWh was not justifiable, as the power generator cannot absorb savings in transmission charges.

CERC criticized the petitioner’s choice of comparing G-DAM prices that were meant for short-term procurement with the petitioner’s tariff for long-term power procurement.

Stating that the petitioner failed to follow bidding guidelines, the Commission rejected the petitioner’s plea to approve the tariff for 300 MW wind-solar hybrid power projects.

It also ordered the petitioner to consider re-bidding.

Recently, the Commission approved tariffs of ₹3.48 (~$0.04)/kWh and ₹3.49 (~$0.04)/kWh for NHPC’s 960 MW wind-solar hybrid power projects.

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