Petition for Adoption of Tariff for long term procurement of 1.5 GW Solar Power from NHPC under of the Electricity Act, 2003 – EQ

Summary:

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## 🌞 **Subject Matter**

**Petition for adoption of tariff for procurement of 1475 MW of Solar Power from NHPC Limited**
under Section 63 of the Electricity Act, 2003, for meeting MSEDCL’s Renewable Purchase Obligation (RPO).

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## 📅 **Chronology of Key Events**

| **Date** | **Event** |
| ———– | —————————————————————————————- |
| 24 Apr 2023 | MNRE designated NHPC as a *Renewable Energy Implementing Agency (REIA)*. |
| 19 Jun 2023 | NHPC issued tender for **3000 MW ISTS-connected solar projects** across India. |
| 6 Nov 2023 | Reverse auction held – 15 bidders participated; tariffs discovered at ₹2.52–₹2.53/kWh. |
| 8 Nov 2023 | NHPC sought consent from MSEDCL for power quantum allocation. |
| 29 Dec 2023 | MSEDCL provided in-principle consent at discovered tariff. |
| 10 Jan 2024 | NHPC shared details of selected developers and warned about upcoming URET pooled tariff. |
| 7 Mar 2024 | MSEDCL signed Power Sale Agreement (PSA) with NHPC for 1475 MW. |
| 20 Mar 2025 | CERC approved NHPC’s tariff adoption order (Petition No. 366/AT/2024). |

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## ⚙️ **Procurement Details**

* **Total Capacity:** 1475 MW (allocated by NHPC to MSEDCL)
* **Tariff:** ₹2.60/kWh (₹2.53 discovered + ₹0.07 trading margin)
* **Tenure:** 25 years from COD
* **Mode:** Long-term power procurement via competitive bidding

**Selected Developers (per NHPC Letter, 10 Jan 2024):**

| Developer | Capacity (MW) | Tariff (₹/kWh, incl. margin) | CUF (%) | Location |
| ———————————— | ————- | —————————- | ——- | ——————– |
| Solairedirect Energy India Pvt. Ltd. | 260 | 2.59 | 32 | Barmer, Rajasthan |
| Avaada Energy Pvt. Ltd. | 1000 | 2.60 | 26 | Bikaner, Rajasthan |
| Hazel Hybren Pvt. Ltd. | 300 | 2.60 | 27.5 | Rajasthan |
| Jakson Ltd. | 400 | 2.60 | 29 | Bikaner, Rajasthan |
| Sprng Energy Pvt. Ltd. | 250 | 2.60 | 28.4 | Jaisalmer, Rajasthan |
| Green Infra Wind Energy Ltd. | 300 | 2.60 | 31 | Barmer, Rajasthan |
| Apraava Energy Pvt. Ltd. | 250 | 2.60 | 29.2 | Barmer, Rajasthan |
| Hinduja Renewables Energy Pvt. Ltd. | 250 | 2.60 | 31 | Barmer, Rajasthan |

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## 📈 **RPO & Power Planning Context**

### **MSEDCL’s RPO Status (as of Feb 2024)**

* Contracted RE capacity: **14,806 MW**
* Commissioned RE capacity: **10,061 MW**
* **Solar RPO shortfall:** 6,732 MUs (FY 2020–23 cumulative)

### **RPO Trajectory (MERC 2024 Amendment)**

| Year | Wind RPO | HPO | Distributed RPO | Other RPO | **Total RPO** |
| ——- | ——– | —– | ————— | ——— | ————- |
| 2024–25 | 0.67% | 0.38% | 1.50% | 27.35% | **29.91%** |
| 2029–30 | 3.48% | 1.33% | 4.50% | 34.02% | **43.33%** |

MERC concluded that the proposed procurement supports **future RPO compliance** and helps **offset past deficits**.

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## ⚡ **Key Financial and Technical Observations**

* **Discovered Tariff:** ₹2.53–₹2.60/kWh (market competitive, comparable to recent bids by SECI, NTPC, SJVN, etc.)
* **Trading Margin:** ₹0.07/kWh (approved per CERC Trading License Regulations, 2020).
* **Landed Tariff to MSEDCL:** ₹2.69/kWh (including margin + transmission loss).
* **APPC (FY 2023–24):** ₹4.81/kWh → New solar power cheaper than average cost.
* **Transmission:** Responsibility of MSEDCL; must ensure GNA availability and avoid delays.

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## 🧩 **Issues Considered by the Commission**

1. **Quantum Justification:**
Procurement of 1475 MW validated under **CEA’s Resource Adequacy Study (FY 2033–34)**, which projected additional 37,000 MW capacity requirement for MSEDCL.

2. **Tariff Competitiveness:**
The tariff (₹2.60/kWh) is **market reflective and consistent** with contemporaneous bids by other agencies (SJVN, NTPC, SECI, GUVNL).

3. **Trading Margin Approval:**
MERC approved ₹0.07/kWh trading margin in line with **Competitive Bidding Guidelines, 2023**.

4. **Transmission Responsibility:**
MSEDCL to **coordinate with STU** for strengthening and timely commissioning of interstate corridors.

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## 📜 **Final Order (Summary of Directives)**

1. **Petition Allowed.**
2. **Tariff Approved:** ₹2.53 + ₹0.07 = ₹2.60/kWh for 25 years.
3. **Procurement Approved:** 1475 MW solar power from NHPC Limited.
4. **PSA between NHPC & MSEDCL approved**; copy to be filed with MERC.
5. Power procured shall be **counted toward MSEDCL’s RPO compliance.**
6. MSEDCL to ensure **timely GNA and transmission readiness** to avoid penalties.

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