CERC approves tariff for NHPC’s 2,400 MW solar project

The Central Electricity Regulatory Commission (CERC) has approved tariff adoption for Inter-State Transmission System (ISTS) connected solar projects while highlighting the absence of a defined policy framework for the Greenshoe Option and restricting enhanced capacity allocation to a single developer.

In NHPC Limited vs. Onward Solar Power Private Limited and others, CERC reviewed tariff adoption for 2,400 MW of ISTS-connected solar photovoltaic projects. NHPC sought approval for 1,200 MW of awarded capacity and an additional 1,200 MW under the Greenshoe Option, to be offered to successful bidders at the lowest discovered tariff after a reverse auction.

Under the initial 1,200 MW allocation, Hero Solar Energy Private Limited received 120 MW, Ganeko One Energy Private Limited received 140 MW, Juniper Green Energy Private Limited received 200 MW, Renew Solar Power Private Limited received 150 MW, and Avaada Energy Private Limited received the largest share of 590 MW. The agreed tariff for all these projects was Rs 4.25 per kWh, except Avaada Energy which initially quoted Rs 4.26 per kWh.

During Greenshoe allocation, one bidder declined additional capacity and another opted for less than its eligible share, leaving 400 MW unallocated after the first round. The full balance was then awarded to Avaada Energy Private Limited in the second round, increasing its Greenshoe allocation to 750 MW. For the Greenshoe capacity, Avaada also received the tariff of Rs 4.25 per kWh in line with bidding conditions.

CERC observed that although the bidding process generally complied with guidelines, a disproportionately large Greenshoe allocation to a single bidder could raise concerns regarding transparency and equal opportunity. The Commission therefore capped Avaada’s Greenshoe allocation at 350 MW, reducing the total adopted Greenshoe capacity from 1,200 MW to 800 MW.

CERC noted that the Greenshoe Option is not defined in the current Ministry of Power bidding guidelines and stated that the lack of statutory clarity leaves its legal interpretation open. Renewable Energy Implementing Agencies, including NHPC, have been directed to approach the Ministry of Power for formal guidance on its framework and allocation methodology.

In the same order, CERC approved NHPC’s trading margin of Rs 0.07 per kWh. This remains subject to execution of Power Sale Agreements and provision of payment security by procurers to generators.

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