Jharkhand regulator allows DISCOM to purchase 700MW of solar power to fulfill its RPO
The Jharkhand State Electricity Regulatory Commission (JSERC) has authorized Jharkhand Bijli Vitran Nigam (JBVNL) to procure 700MW of Interstate Transmission System (ISTS) Connected Solar Power from Solar Energy Corporation of India (SECI) to fulfill its revolving purchase obligation (RPO).
In July 2018, SECI organized a tariff tender for 2 GW of solar projects under the ISTS Tranche-I program. The six successful bidders included ACME Solar Holdings (600MW), Shapoorji Pallonji Infrastructure Capital (250MW), Hero Solar Energy (250MW), Mahindra Susten (250MW), Azure Power India (600MW) and Mahoba Solar (50MW). ). MW). The tariffs discovered in the offer ranged from ₹2.44 (~$0.033)/kWh to ₹2.54 (~$0.0349)/kWh.
SECI has entered into power purchase agreements (PPAs) with developers at the uncovered rate as part of the bidding process and back-to-back power sales agreements with power utilities to allow them to fulfill their RPO. In 2020, Central Electricity Regulatory Commission (CERC) approved the tariff of ₹2.54 (~$0.035)/kWh as requested by Tata Power Delhi Distribution to source 100MW of solar power from SECI as part of this offer.
Other distribution licensees that had applied to purchase power from SECI under this bid were BSES Yamuna (150MW), BSES Rajdhani (400MW), Chhattisgarh State Power Distribution Company (250MW), Haryana Power Purchase Center (100 MW), and GRIDCO (300 MW).
JBVNL’s board of directors approved the purchase of 700 MW of solar power from SECI to meet its RPO. It was further argued that the uncovered price was beneficial to JBVNL as the average cost of power purchase for JBVNL in FY 2018-2019 was ₹4.08 (~$0.052)/kWh.
However, SECI wanted the Commission to set a weighted average tariff to be paid by JBVNL since CERC had only adopted the tariff for the individual projects of each successful bidder in the ISTS program tender.
SECI then argued that Arina Solar Power (Shapoorji Pallonji), one of the developers identified to supply 250MW of solar power to JBVNL, had terminated the PPA due to force majeure and filed a petition with CERC.
The uniform tariff proposal for all buyers of the 2 GW capacity, including JBVNL, was not approved by CERC. Therefore, SECI stated that it was necessary to map the relevant PPAs for each buyer. In the case of JBVNL, the 700 MW was mapped as Azure Power for 200 MW, Clean Solar Power (Hero Solar) for 250 MW and Arina Solar for 250 MW.
Meanwhile, Clean Solar sought to get involved in the deal because a delay in PSA approval limited disbursements of funds by lenders, thus delaying the execution of its project.
The Commission has ruled that JBVNL can source 700 MW of solar power connected to the ISTS from SECI to fulfill its RPO.
With respect to the application for approval of a weighted average tariff, the Commission found that since SECI purchases solar energy from different developers and sells it to different utilities in various states, CERC would be the appropriate Commission to adopt the tariff.
The Commission noted that its role was limited to allowing JBVNL to purchase or not to purchase this electricity from SECI through PPA for 25 years.
Jharkhand recently announced the new “Jharkhand Solar Policy 2022”, aiming to deploy a cumulative capacity of 4 GW in the state by 2026. The government intends to install 3 GW of utility-scale solar projects during of the next five years. The solar parks should constitute 700 MW and the non-solar parks 1 GW.
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Arjun Joshi is a journalist at Mercom India. Prior to joining Mercom, he worked as a technical writer for enterprise resource software companies based in India and overseas. He holds a BA in Journalism, Psychology and Optional English from Garden City University, Bangalore. More articles from Arjun Joshi.