Petition for Adoption of Tariff for Setting up of 1200 MW ISTS-connected Solar PV Power Projects with 600 MW/2400 MWh Energy Storage Systems anywhere in India – EQ

Summary:

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#### 1. Project & Regulatory Overview

– **Core Objective:** SJVN sought the adoption of tariffs discovered through a competitive bidding process for a large-scale renewable energy project. This is a **post-bid, regulatory approval** step required under the Electricity Act, 2003.
– **Project Scope:** 1200 MW of Interstate Transmission System (ISTS)-connected Solar PV Power Projects, coupled with a 600 MW / 2400 MWh Energy Storage System (ESS), to be set up anywhere in India.
– **Legal Basis:** The petition was filed under **Section 63 of the Electricity Act, 2003**, which mandates that the Appropriate Commission (CERC) shall adopt the tariff if it has been determined through a transparent bidding process in accordance with government guidelines.
– **Governing Guidelines:** The Ministry of Power’s “Guidelines for Tariff Based Competitive Bidding Process for Procurement of Firm and Dispatchable Power from Grid Connected Renewable Energy Power Projects with Energy Storage Systems” (dated 09.06.2023).

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#### 2. The Bidding Process & Outcome

– **Role of SJVN:** SJVN acted as the **Intermediary Procurer / Renewable Energy Implementing Agency (REIA)** , conducting the bidding process on behalf of end DISCOMs. It will earn a trading margin of ₹0.07/kWh for this role.
– **Key Dates:**
– RfS Issued: **30.08.2024**
– e-Reverse Auction: **09.05.2025**
– Letters of Award (LoAs) Issued: **28.05.2025**
– Petition Filed: **01.09.2025**
– **Bidding Response:** The tender saw **significant oversubscription**. 19 bidders submitted bids for a total cumulative capacity of **4,880 MW** against the offered 1,200 MW, indicating robust market interest and confidence.
– **Successful Bidders & Discovered Tariff:** After a single-stage, two-envelope bidding process followed by an e-reverse auction, six successful bidders were awarded a total of 1,200 MW capacity at tariffs ranging from **₹3.32/kWh to ₹3.33/kWh**.

| Sr. No. | Successful Bidder | Contracted Capacity (MW) | Discovered Tariff (₹/kWh) |
| :— | :— | :— | :— |
| 1. | M/s SAEL Industries Limited | 150 | 3.32 |
| 2. | M/s Jindal India Renewables Energy Ltd. | 300 | 3.32 |
| 3. | M/s Sembcorp Green Infra Pvt. Ltd. | 150 | 3.32 |
| 4. | M/s JBM Renewables Pvt. Ltd. | 150 | 3.32 |
| 5. | M/s Fastnote Biofuels Pvt. Ltd. | 100 | 3.33 |
| 6. | M/s Reliance NU Energies Pvt. Ltd. | 350 | 3.33 |
| | **Total** | **1200** | |

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#### 3. Key Business Arguments & Regulatory Analysis

– **Petitioner’s (SJVN) Key Arguments for Tariff Adoption:**
– **Conformity:** The entire bidding process strictly adhered to the Ministry of Power’s 2023 Guidelines, as certified by the duly constituted Evaluation Committee.
– **Competitiveness:** The discovered tariff (₹3.32-3.33/kWh) is competitive and economical compared to other contemporaneous tenders with similar configurations.
– It was **lower** than SECI’s December 2024 tender for a similar 4-hour storage configuration (₹3.52-3.53/kWh).
– The marginally higher rate compared to NHPC’s January 2025 tender (₹3.09-3.10/kWh) was justified due to NHPC’s **2-hour storage** (half the duration) and later timing when equipment prices had further declined.
– **Transparency:** The significant oversubscription (4.88 GW bid for 1.2 GW offered) and wide participation from major developers proved the process was transparent and competitive.

– **CERC’s Analysis & Decision:**
– **Satisfied with the Process:** The Commission confirmed that the bidding process was conducted in accordance with the Ministry of Power’s Guidelines. The conformity certificate from SJVN’s Evaluation Committee and the high level of bidder participation were key factors in this determination.
– **Tariff Adoption:** In line with Section 63 of the Electricity Act, 2003, the CERC **adopted the tariffs** of ₹3.32/kWh and ₹3.33/kWh for the respective successful bidders.
– **Conditional Approval:** The tariff adoption is **subject to SJVN finalizing and executing** the Power Sale Agreements (PSAs) with the end DISCOMs and the Power Purchase Agreements (PPAs) with the project developers.
– **Trading Margin:** The Commission allowed the trading margin of ₹0.07/kWh for SJVN, but clarified that the specific contractual arrangements for payment security (e.g., escrow, LC) will determine the final applicability of this margin under the Trading License Regulations, 2020.

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#### 4. Critical Business Insights & Implications

1. **Regulatory Milestone:** This order is the final, critical regulatory approval. It validates the entire commercial process, giving financial institutions and investors the certainty required to fund these large-scale projects. The tariffs are now locked in for the 25-year PPA term.

2. **Market Benchmark:** The adopted tariff of ₹3.32-3.33/kWh for a **4-hour storage configuration** establishes a key price benchmark for the Indian renewable energy market. It demonstrates the increasing cost-competitiveness of solar-plus-storage solutions and provides a reference point for future tenders of similar scale and complexity.

3. **Vendor Opportunity:** For companies in the solar PV and energy storage system (ESS) supply chain (module manufacturers, battery suppliers, EPC contractors), this order confirms that six major developers (SAEL, Jindal, Sembcorp, JBM, Fastnote, Reliance) have secured firm, long-term contracts. This translates into a **defined, imminent pipeline of work** for the supply and installation of 1.2 GW of solar capacity and 2.4 GWh of storage.

4. **Risk Mitigation for Developers:** The CERC’s approval under Section 63 provides a robust, legally backed tariff, minimizing regulatory risk for the successful bidders. This is a key factor in securing project financing and ensures predictable revenue streams over the long term.

5. **Evolving Market Dynamics:** The comparison with the NHPC tender highlights a critical market trend: **storage duration is a key differentiator in pricing**. Bidders and analysts must closely evaluate storage requirements (hours) when comparing tariffs across different tenders to accurately assess market competitiveness.

6. **Financial Commitment:** The LoA conditions require successful bidders to make significant financial commitments within tight timelines, including:
– Success charges of **₹1.00 Lakh/MW** (plus GST) within 30 days.
– A Performance Bank Guarantee (PBG) of **₹27.05 Lakhs/MW** before signing the PPA.
– Achieving financial closure six months prior to the scheduled commercial supply date (SCSD).
– This underscores the need for strong financial backing and efficient project execution capabilities.

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