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CERC Approves Rs 3.13/kWh Tariff for NHPC’s 1.2 GW Solar-Storage Projects

The Central Electricity Regulatory Commission has approved a tariff of Rs3.13/kWh for 1,200 MW of interstate transmission system (ISTS)-connected solar projects with integrated energy storage systems (ESS) proposed by NHPC Limited. The Commission, however, allowed only a limited portion of the additional capacity sought under the greenshoe option.

It also sanctioned a trading margin of Rs0.07/kWh, subject to the condition that NHPC provides appropriate payment security mechanisms, such as an escrow arrangement or an irrevocable and revolving letter of credit for solar power generators.

The tender, issued in March 2025, covered 1,200 MW of solar capacity paired with 600 MW/2,400 MWh of storage, along with an option to expand capacity further under a greenshoe provision. The projects are planned across multiple states, including Rajasthan, Telangana, Maharashtra, Karnataka, Gujarat, Madhya Pradesh, and Andhra Pradesh.

A total of 15 bids were received, of which 14 qualified for the e-reverse auction. The discovered tariff of Rs3.13/kWh applied to the entire base capacity. Following the bidding process, companies such as Reliance Infrastructure, JBM Renewables, PNC Infratech, SAEL Industries, and Navayuga Engineering secured various portions of the project capacity along with associated storage allocations.

Under the greenshoe option, additional capacity was initially awarded to SAEL Industries and Navayuga Engineering at the same tariff. NHPC subsequently approached the Commission for approval of the discovered tariff and the proposed trading margin, stating that the bidding process was competitive and aligned with prevailing market rates.

The Commission observed that the tariff was discovered through a transparent competitive process and found it to be reasonable when compared with recent benchmarks. However, it raised concerns over the use of the greenshoe option, noting that such provisions are not explicitly covered under existing bidding guidelines and could raise compliance issues under Section 63 of the Electricity Act, 2003.

As a result, the Commission limited the additional capacity allocation, approving 300 MW for SAEL Industries and 60 MW for Navayuga Engineering under the greenshoe option, instead of the higher allocations initially proposed.

While approving the tariff of Rs3.13/kWh for both the base and the allowed additional capacity, the Commission reiterated that the approved trading margin of Rs0.07/kWh is conditional. In the absence of the required payment security arrangements, the margin would be reduced to Rs0.02/kWh.