The Odisha Electricity Regulatory Commission (OERC) has approved the power purchase agreement (PPA) signed between Grid Corporation of Odisha (GRIDCO) and Green Energy Development Corporation of Odisha (GEDCOL) to procure solar power from the 8 MW solar photovoltaic (PV) projects to be developed by GEDCOL.

The Commission heard the submissions made by both parties and observed that GEDCOL had initially offered a levelized tariff of ₹3.02 (~$0.04)/kWh, including ₹0.05 (~$0.00067)/kWh as GEDCOL’s margin, for 25 years.

The proposed tariff by GEDCOL was at the higher side compared to the tariff of ₹2.79 (0.037)/kWh discovered in July 2018 for a 75 MW solar project by Aditya Birla Renewable.

GRIDCO had requested GEDCOL to further negotiate the tariff given the 13th Finance Commission Grant of ₹190.8 million (~$2.55 million), the reduced burden due to lease rent, lower evacuation cost since the solar projects are located near the grid substations.

Subsequently, GRIDCO agreed to procure the entire power from GEDCOL’s 8 MW solar PV project at a tariff of ₹2.79 (~$0.037)/kWh plus the GEDCOL margin of ₹0.05 (~$0.00067)/kWh.

The PPA was executed between GRIDCO and GEDCOL on September 1, 2020, for setting up of 8 MW solar PV project at five locations on un-utilized surplus land owned by Odisha Power Transmission Corporation (OPTCL) grid substations at Baripada, Jayanagar, New Bolangir Substations, Manmunda project site and Mukhiguda Power House in Odisha with an applicable tariff of ₹2.84 (~$0.038)/kWh for 25 years including the GEDCOL margin of ₹0.05 (~$0.00067)/kWh.

The scheduled commercial operation date for the solar project is 13 months from the signing of the PPA. But GRIDCO may start procuring power earlier than the scheduled commercial operation date to make up for its renewable purchase obligation (RPO) shortfall.

The Commission has approved the PPA executed between GRIDCO and GEDCOL to procure solar power from the 8 MW solar projects towards fulfilling its RPO.

Further, both GRIDCO and GEDCOL are directed to incorporate the issues regarding evacuation of power and changes to clauses in the PPA.

Earlier this month, OERC approved the procurement of 500 MW solar power by GRIDCO from the Solar Energy Corporation of India (SECI). The project is being developed under the interstate transmission system (ISTS)-connected solar projects linked with the manufacturing program (Tranche-I). GRIDCO will be buying the power to meet its RPO targets.

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Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.