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Power regulator refuses to fix trading margin for SECI

Power regulator refuses to fix trading margin for SECI

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In its latest orders for approving the tariffs discovered in the recent solar and wind power auctions, CERC said that ‘it is upto the contracting parties to mutually agree on trading margin’

National electricity regulator Central Electricity Regulatory Commission (CERC) has refused to approve the trading margin of 7 paise/unit to the Solar Energy Corporation of India (SECI), which is the nodal agency for implementing central government’s renewable energy projects across the country.

In its latest orders for approving the tariffs discovered in the recent solar and wind power auctions, CERC said that it is not in its purview to fix trading margin for long-term transactions, and “it is upto the contracting parties to mutually agree on trading margin”.

The decision can be detrimental for SECI which relies majorly on trading margins for being the aggregator of renewable energy. Under this model, SECI supplies power to a number of states from solar and wind plants owned by other developers, earning a trading margin of Rs 0.07/unit from such transactions. The development comes at a time when, sources say, states such as Andhra Pradesh, Punjab and Bihar have been requesting power regulators to reduce the trading margin for renewable aggregators to Rs 0.02/unit. CERC, however, approved the tariffs discovered through reverse auctions for 1,200 MW of solar power units and similar capacity of wind plants.

The winning bidders in the solar auctions, held in February, were ReNew Power (Rs 2.55/unit), Azure Power (Rs 2.58/unit), Eden Renewable (Rs 2.60/unit) and SoftBank Energy (Rs 2.61/unit). SECI would sell power from these plants to Odisha, Bihar and Delhi. In the auctions for wind power, also held in February, the lowest bid of Rs 2.82/unit was quoted by Ostro Energy (Now acquired by ReNew Power), Adani Renewable, Srijan Energy and Powerica. Projects of SoftBank Energy and Zenataris Renewable Energy were awarded contracts at Rs 2.83/unit. The wind-based electricity will be procured by Bihar, Kerala, Uttar Pradesh, Goa, Delhi, Chandigarh and Odisha.

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Source: financialexpress

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Anand Gupta Editor - EQ Int'l Media Network