Petition for Adoption of Tariff of 1200 MW ISTS Grid connected Wind – Solar Hybrid Power projects on anywhere in India with “Green-Shoe Option” by Ministry of Power – EQ
Summary:
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### Green-Shoe Option Allocation
NHPC offered an **additional 1,200 MW** under the Green-Shoe Option at the L1 tariff (₹3.41/kWh). The allocation proceeded as follows:
| Round | Bidder | Allocation (MW) |
|——-|——–|—————-|
| **First Round** | Adani | 600 |
| | Avaada | 210 |
| | Sprng & Illuminate | Declined |
| | **Subtotal** | **810** |
| **Second Round** | Avaada (remaining 390 MW declined by others) | 390 |
| | **Total Green-Shoe** | **1,200** |
#### Final Allocations (Base + Green-Shoe)
| Bidder | Base (MW) | Green-Shoe (MW) | Total (MW) | Tariff (₹/kWh) |
|——–|———–|—————-|————|—————|
| Adani | 600 | 600 | 1,200 | 3.41 |
| Avaada | 210 | 600 | 810 | 3.41 (Green-Shoe), 3.42 (Base) |
| Sprng | 150 | – | 150 | 3.41 |
| Illuminate | 240 | – | 240 | 3.41 |
| **Total** | **1,200** | **1,200** | **2,400** | |
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### Key Issues Examined by CERC
#### 1. **Validity of Green-Shoe Option**
– **NHPC’s Argument**: The Guidelines do not restrict capacity in MW terms; the Green-Shoe Option was included to achieve MNRE’s bidding targets, avoid concurrent bids, and improve efficiency.
– **CERC’s Observation**: The Guidelines do **not expressly provide for or define** a “Green-Shoe Option.” While NHPC included it in the RfS, its continued use without explicit provision or prior approval raises concerns about **transparency, consistency, and fair treatment**.
#### 2. **Allocation to Avaada Beyond First Round**
– Avaada was allocated **210 MW in the first round** and later **390 MW in the second round** (capacity declined by others), totaling **600 MW** under Green-Shoe.
– CERC noted that this **enhanced allotment beyond originally envisaged allocation** may affect the **level playing field** and **competitive bidding framework**.
#### 3. **Trading Margin**
– NHPC sought approval for a **trading margin of ₹0.07/kWh** to be recovered from DISCOMs.
– CERC held that under the **Trading Licence Regulations**:
– If NHPC provides **escrow or LC** to generators, trading margin can be **mutually agreed** (₹0.07/kWh allowed).
– If **not provided**, margin is capped at **₹0.02/kWh**.
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### CERC’s Final Decision
#### A. **Tariff Adoption (Partial)**
CERC **adopted the tariff** but **restricted Avaada’s Green-Shoe allocation to 210 MW** (only the first round). The adopted allocations are:
| Bidder | Capacity (MW) | Tariff (₹/kWh) |
|——–|—————|—————|
| Adani | 600 (Base) + 600 (Green-Shoe) | 3.41 |
| Avaada | 210 (Base) + 210 (Green-Shoe) | 3.41 (Green-Shoe), 3.42 (Base) |
| Sprng | 150 | 3.41 |
| Illuminate | 240 | 3.41 |
| **Total Adopted** | **1,200 (Base) + 810 (Green-Shoe)** | |
*Note: The second-round allocation of 390 MW to Avaada was **not adopted**.*
#### B. **Direction to REIAs**
CERC directed **all Renewable Energy Implementing Agencies (REIAs)**, including NHPC, to approach the **Ministry of Power** for clarification on:
– The Green-Shoe Option,
– Manner and specificity of allocation,
– Applicability of the **50% cap** on allocation to a single bidder in the context of Green-Shoe,
– To ensure **uniformity, competitive neutrality, and regulatory certainty**.
#### C. **Compliance with Trading Margin Rules**
– NHPC may charge **₹0.07/kWh** trading margin **if** it provides escrow/LC to generators.
– If not, margin is capped at **₹0.02/kWh** under Regulation 8(1)(d) and (f) of the Trading Licence Regulations.
#### D. **Payment Security**
– NHPC must comply with **escrow/LC requirements** under Regulation 9(10) of the Trading Licence Regulations.
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