The Central Electricity Regulatory Commission (CERC) has partly approved tariffs discovered through a competitive bidding process for firm and dispatchable renewable energy (FDRE) projects procured by NHPC, while reducing the additional capacity proposed under the greenshoe option, MERCC reported.
The Commission approved tariffs ranging from Rs 4.37 (~$0.048) per kWh to Rs 4.38 (~$0.048) per kWh for 1.8 GW of the 2.1 GW capacity sought by NHPC. This includes 1.2 GW under the base allocation and 600 MW under the greenshoe option, instead of the full 900 MW requested. It also capped the trading margin at Rs 0.02 (~$0.0002) per kWh.
CERC further directed all renewable energy implementing agencies, including NHPC, to seek clarification from the Ministry of Power on the greenshoe mechanism to ensure transparency and regulatory certainty in future bidding processes.
NHPC had petitioned the Commission to adopt tariffs for procuring 2.1 GW of interstate transmission system-connected FDRE. The company issued a Request for Selection in March 2024 for an initial 1.2 GW and later added a greenshoe option allowing up to 1.2 GW of additional capacity.
After an e-reverse auction conducted in September 2024, five companies—Essar Renewables, Serentica Renewables, Juniper Green Energy, Hexa Climate Solutions, and Avaada Energy—were selected.
NHPC stated that the discovered tariffs were in line with prevailing market rates for similar FDRE projects awarded by other agencies such as NTPC, SECI, and SJVN. It also defended the higher allocation under the greenshoe option as consistent with the bidding document and common industry practice, even though the central bidding guidelines do not explicitly mention the provision. The company had also requested approval for a trading margin of Rs 0.07 (~$0.0007) per kWh.
The Commission said the base bidding process was transparent and complied with Section 63 of the Electricity Act, adding that the tariffs were reasonable and within the range seen in similar projects.
However, it noted that allocating significantly higher capacity to some bidders under the greenshoe option—particularly Avaada Energy and Hexa Climate Solutions—could raise concerns about fairness, equal treatment, and transparency.
As a result, CERC limited the greenshoe allocation to 470 MW for Avaada Energy, 80 MW for Hexa Climate Solutions, and 50 MW for Juniper Green Energy, aligning them with their first-round allocations. The total greenshoe capacity was capped at 600 MW.
The Commission instructed NHPC and other implementing agencies to approach the Ministry of Power for formal guidance on the greenshoe option, including possible limits on additional capacity.
On the trading margin, CERC ruled that NHPC may charge a margin according to power sale agreements once they are executed, but it will be capped at Rs 0.02 per kWh if adequate payment security measures are not in place.
In June last year, the Commission approved tariffs between Rs 4.48 (~$0.051) per kWh and Rs 4.56 (~$0.052) per kWh for NHPC’s 1.2 GW FDRE projects but rejected the company’s request for a trading margin of Rs 0.07 (~$0.0007) per kWh.
