NTPC Granted Electricity Trading License by CERC

CERC has granted NTPC Ltd. with an Electricity Trading License to expedite solar and wind projects in the country.

The Central Electricity Regulatory Commission (CERC) has approved the application filed by NTPC ltd. to grant the PSU with an electricity trading license in the country. The central commission has proposed granting the power utility with a trading license, to help it in implementation of renewable energy projects, especially solar power projects in India.

NTPC had petitioned the CERC seeking a grant of Category I license for inter-state trading in electricity in all states and Union Territories. In its petition, the utility highlighted that it had been asked by the Ministry of New and Renewable Energy (MNRE) to implement 15 GW of solar PV projects, under the National Solar Mission.

The company expressed that a trading license would help in setting up this capacity. It had stated that being an intermediary procurer, NTPC would be required to aggregate the solar power purchased from different solar power generators and sell it to the discoms. In such cases, the intermediary procurer will be playing the role of a trader, namely buying power from the developers and selling the same to one or more discoms.

NTPC had previously filed a similar petition in 2016 for grant of a trading license, however, the commission had rejected the prayer of NTPC and observed that it can utilize the trading license already granted to its wholly-owned subsidiary the NTPC Vidyut Vypar Nigam Limited.

In its findings, the commission noted that NTPC has set a target of achieving 32 GW of Renewable Energy (RE) based capacity by 2032 out of which 30 GW is solar. And that, under the initiative of MNRE for procurement of 20000 MW, NTPC has been identified as the Nodal Agency.

As part of this, NTPC has stated that it selected the Wind/Solar Power Developers for implementation of projects and procurement of cumulative capacity of 1150 MW wind power and 2000 MW solar power under “BuildOwn-Operate” (B-O-O) basis with minimum project size of 50 MW, wherein competitive tariff(s) of the order of Rs 2.67/kWh for solar power and Rs. 2.87/kWh for wind power including a trading margin of 7 paise/kWh had been discovered.

In its order, the commission stated, “we are of the view that in case of NTPC, despite the fact that it does not meet the current ratio and liquidity ratio criteria of the regulations, is financially sound with respect to liquidity for carrying out electricity trade. It meets other criteria for grant of trading license as required under the Trading License Regulations. Keeping in view the facts and circumstances of the case, we, relax the current ratio and liquidity ratio requirement in public interest in view of the policy of the Government of India for promoting renewable energy. Accordingly, the Commission proposes to grant Category-I trading license to the Petitioner.”

The commission has now invited suggestion or objections to the proposal.

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