SECI Proposes, CERC Disposes- JSW Energy’s 500 MW BESS Tender In Trouble

In a blow to JSW Energy’s BESS plans, the tender it won for SECI’s 500 MW/1000 MWh standalone battery energy storage systems has failed to pass muster with CERC. On plea to adopt the tariffs for the said tender, won by JSW Energy at Rs 10.88/unit after due process, the CERC pointed to the inexplicably long time taken by SECI to award the tender formally, despite signing the BESSA (Battery Energy Storage Sales Agreement) with GUVNL.

The tender conditions specifically mentioned that the BESSPA would be signed immediately after the signing of the BESSA. Delving into the timelines of the project, CERC made it plain that the long delays, during which other tenders for energy storage were awarded at much lower rates, including more wins for JSW Energy itself, would not be in the best interest of consumers. It also cited a similar case followed up before the Supreme Court of India. It was related to a Rajasthan discom and a power company.

“We are, therefore, of the considered view that the learned APTEL has grossly erred in holding that the State Commission has no power to go into the question, as to whether the prices quoted are market aligned or not and also not to take into consideration the aspect of consumers’ interest. It is needless to state that this Court, time and again, in various judgments has recognized the requirement of balancing the consumers’ interest with that of the interest of the generators. It will not be permissible to take a lopsided view only to protect the interest of the generators ignoring the consumers’ interest and public interest,” the Supreme court order cited in the CERC order read.

CERC bench observed that the e-Reverse Auction was conducted on 25.08.2022, whereas the LoAs were issued on 18.01.2023. Hence, there was a delay of 145 days in the issuance of LoAs.

Further, BESSA was executed on 26.06.2023, i.e., after 160 days of issuance of LoAs. Further, the BESPAs were to be executed subsequent to the signing of the BESSAs with the buying utilities. SECI entered into a BESSA with the distribution licensee Gujarat Urja Vikas Nigam Limited on 26.06.2023. As per Clause 3 of ‘G: Contract Award and Conclusion’ of ‘Section III: Bidding Process and Award of Projects’ of the Guidelines, the BESPA(s) should preferably be signed immediately after the signing of the BESSA(s). However, SECI signed BESPA for 150MW contracted capacity with the successful bidder identified through the competitive bidding process, i.e., JSW Renew Energy Five Limited on 27.02.2024, which is 245 days after the BESSA signed with GUVNL. SECI has not submitted any explanation for these delays.

In effect, while disposing of SECI’s original plea for the adoption of tariffs and its own trading margin, CERC effectively seems to have shut the door on the future of this particular BESS project.  For JSW Energy, the CERC order puts the project under question, even as it has been looking at a June 2025 date for commissioning with preparatory work started. The Build Own Operate Transfer (BOOT) model with a tenure of 12 years has a Battery Storage Purchase Agreement for 60% of the capacity with SECI and balance is open for sale. The  Identified site is at Fatehgarh, Rajasthan. The company hoped to participate in ancillary market with the open capacity.