CERC adopts Rs 3.13/kWh tariff for FDRE projects, flags greenshoe use

The Central Electricity Regulatory Commission (CERC) has adopted a tariff of Rs 3.13 per kWh for 1,200 MW of ISTS-connected solar projects, coupled with 600 MW/2,400 MWh Energy Storage Systems (ESS), discovered through a competitive bidding process conducted by NHPC Limited. The Commission, however, restricted part of the additional capacity allocation under the ‘Greenshoe Option’ and called for policy clarity on its use.

In its April 10, 2026 order, CERC approved tariffs discovered through e-reverse auction for five bidders. The successful base allocations are: Reliance Infrastructure Limited (390 MW), PNC Infratech Limited (300 MW), SAEL Industries Limited (300 MW), JBM Renewables Pvt. Ltd. (150 MW), and Navayuga Engineering Company Limited (60 MW).

NHPC had issued the tender in March 2025 for Firm and Dispatchable Renewable Energy (FDRE) projects under Ministry of New and Renewable Energy (MNRE) framework. Fifteen bids were received, and the auction held on July 15, 2025 discovered a uniform tariff of Rs 3.13/kWh.

CERC examined NHPC’s proposal to allocate up to an additional 1,200 MW under a ‘Greenshoe Option’. NHPC had awarded 440 MW extra capacity to Navayuga Engineering Company Limited and 300 MW to SAEL Industries Limited after other bidders declined additional allocation.

The Commission noted that the ‘Greenshoe Option’ is not explicitly defined in the Ministry of Power’s bidding guidelines under Section 63 of the Electricity Act, 2003. It raised concerns regarding transparency and consistency in allocation without a clear regulatory basis.

Accordingly, CERC restricted tariff adoption for Navayuga to 60 MW of additional capacity, instead of the 440 MW awarded. The allocation for SAEL Industries (300 MW) was retained.

CERC directed all Renewable Energy Implementing Agencies (REIAs) to seek formal clarification from the Ministry of Power on the use of the Greenshoe Option, including rules on allocation and applicability of caps on capacity per bidder.

The Commission also approved NHPC’s trading margin of Rs 0.07/kWh, subject to provision of payment security mechanisms such as a Letter of Credit or escrow arrangement. In the absence of such security, the margin will be capped at Rs 0.02/kWh under applicable regulations.

The order was issued by a bench comprising Jishnu Barua and Members Ramesh Babu V., Harish Dudani, and Ravinder Singh Dhillon.

The featured photograph is for representation only.