CERC Adopts Renewable Project Tariffs Before Signing Of PSA

Continuing with its recent trend, the Central Electricity Regulatory Commission (CERC) in its two latest tariff order petitions has adopted the tariffs even before the signing of the Power Supply Agreements (PSAs) and Power Purchase Agreements (PPAs).

The latest case was related to the tariff adoption of 170 MW of wind project tender floated by SJVN. On the other hand, the central agency also adopted the same stance in a recent petition of tariff adoption for NTPC’s 1500 MW of solar project. In the case of NTPC, CERC had argued that the solar guidelines do not link the filing of the petition with the execution of the PPA and PSA but it only talks about scrutinizing the whole process of bidding and awarding of projects to ensure transparency.

“…we do not see any cogent reason for not proceeding with the adoption of tariff when the Solar Guidelines itself do not link the filing of the Petition with the execution of the PPA and PSAs. Also, the scope of adoption proceedings is limited to examining as to the tariff has been determined through a transparent bidding process and in accordance with the provisions of the Guidelines. In any case, such adoption of tariff by the Commission is being made subject to the awarded capacity being tied up under the PPA and PSAs amongst the concerned parties,” CERC had said in the NTPC case.

SJVN Wind Energy Case 

In a recent case before the Central Electricity Regulatory Commission (CERC), SJVN sought approval for tariff adoption without waiting to tie up the entire awarded wind energy capacity under the PPAs (Power Purchase Agreements) and PSAs (Power Supply Agreements). The order from the central electricity regulatory came when it was hearing the tariff adoption pleas involving two wind energy project bidders—Adyant Enersol Private Limited (a subsidiary of Datta Infra), and UPC Renewables India Management.

In its latest order, the commission responded to the petition requesting approval of the discovered tariffs for the selected projects. Despite only 170 MW out of the 600 MW planned capacity being tied up under agreements so far, CERC proceeded with tariff adoption for the wind projects.

CERC in its response noted, “We have considered the submissions made by the parties. In the past, the Commission has proceeded with the adoption of tariffs only to the extent of the awarded capacity tied up under the PPAs and PSAs with the successful bidders/developers and the distribution licensees, respectively.”

About The Tender

In January 2025, SJVN announced Adyant Enersol (Datta Infra) and UPC Renewables as the winners of its 600 MW wind energy project. These winners are expected to develop inter-state transmission system (ISTS)–connected wind power projects on a build-own-operate basis. The tender for this project was released in March 2024, and the results were announced after 10 months.

According to the tender results, SJVN awarded a 170 MW project out of the total 600 MW wind project. As per the tender announcement, Adyant Enersol secured a 70 MW wind project at a tariff of ₹3.98/kWh, while UPC Renewables won a 100 MW wind project at ₹3.99/kWh. The relatively high prices are probably a reason why SJVN did not go beyond 170 MW for awarding the tender.

CERC Logic

]CERC added, “In the present case, out of the total awarded capacity of 600 MW, the Petitioner has so far tied up only 170 MW under the PPAs and PSAs. However, keeping in view the overall emphasis of the Guidelines on the expeditious adoption of tariffs, we consider it appropriate to proceed with the adoption of tariffs without waiting for the entire awarded capacity to be tied up under the PPAs and PSAs.” A total of 220 MW in bids were received against the tendered capacity of 600 MW. Following the e-RA process, two bidders qualified for the issuance of the Letter of Award with a combined capacity of 170 MW.

In the present case, the awarded capacity is yet to be fully tied up with distribution licensees. Accordingly, the trading margin shall be determined as per the provisions of the PSAs to be executed between SJVN and the distribution licensees, following the Guidelines, PPAs, and Trading License Regulations.

Conclusion

The early adoption of tariffs by the CERC seems to have signaled a positive sign where the parties can have the liberty to pass through the legal hurdles at an early stage. The move is likely to expedite the whole process of developing a project and boosting the confidence of the developers and the concerned parties.