--- title: "CERC Approves Tariff For 1530 MW Renewable Energy Procurement By NTPC" date: 2025-03-13 author: "King Stubb & Kasiva" url: https://ksandk.com/newsletter/cerc-tariff-1530-mw-renewable-energy-procurement-ntpc/ --- # CERC Approves Tariff For 1530 MW Renewable Energy Procurement By NTPC Posted On - 13 March, 2025 • By - King Stubb & Kasiva ## Summary The Central Electricity Regulatory Commission (CERC) approved tariffs for a 1,530 MW wind-solar hybrid power project, discovered through a competitive bidding process conducted by NTPC Limited. The tariffs range from ₹4.64/kWh to ₹4.73/kWh, with the commission affirming the transparency of the bidding process under Section 63 of the Electricity Act, 2003. The order also conditionally approved a trading margin of ₹0.07/kWh, subject to compliance with payment security mechanisms. ## Case Timeline - **31.10.2023**: NTPC floated the tender for 3,000 MW ISTS-connected renewable energy projects. - **15.03.2024**: Standing Tender Committee shortlisted 10 bidders with a cumulative capacity of 1,980 MW. - **22.03.2024**: e-Reverse Auction conducted, finalizing tariffs. - **22.04.2024**: Letters of Award (LOAs) issued to seven developers for 1,530 MW. - **25.07.2024**: First hearing; CERC directed NTPC to submit compliance details. - **29.08.2024**: Second hearing; NTPC sought additional time for submissions. - **09.09.2024**: Final hearing; CERC noted no objections from respondents. - **Order Date**: Disposed in 2024 (exact date unspecified). ## Issue Raised The petition sought adoption of tariffs discovered through competitive bidding for 1,530 MW of hybrid renewable energy projects under Section 63 of the Electricity Act, 2003. A secondary issue was the approval of a trading margin of ₹0.07/kWh for NTPC. ## Appellant’s Arguments (NTPC) 1. **Transparent Bidding Process**: The tariff was discovered through an international competitive bidding process, adhering to Ministry of Power guidelines (09.06.2023). 2. **Compliance with Guidelines**: A Bid Evaluation Committee certified the process as fair and reasonable. 3. **Public Interest**: The tariffs (₹4.64–₹4.73/kWh) are competitive and beneficial for procurers and consumers. 4. **Trading Margin Justification**: Requested ₹0.07/kWh margin, citing long-term back-to-back agreements with distribution companies. ## Respondents’ Arguments No formal replies were filed by the seven respondents despite notices. The absence of objections implied tacit agreement with NTPC’s submissions. ## Order 1. **Tariff Adoption**: CERC approved tariffs under Section 63, validating the competitive process. The adoption is contingent on NTPC finalizing Power Purchase Agreements (PPAs) and Power Sale Agreements (PSAs). 2. **Trading Margin**: Approved ₹0.07/kWh margin, but capped at ₹0.02/kWh if NTPC fails to provide escrow/revolving credit mechanisms to generators. 3. **Compliance Directive**: NTPC must submit executed PPAs/PSAs or report delays to CERC. ## Analysis 1. **Competitive Bidding Success**: The auction attracted 10 bidders, ensuring market-driven tariffs. The “bucket filling” method prioritized lower tariffs, aligning with renewable energy cost reduction trends. 2. **Regulatory Compliance**: CERC emphasized strict adherence to guidelines, reinforcing trust in public procurement processes. 3. **Conditional Approvals**: Linking tariff adoption to PPA finalization ensures accountability, while the trading margin cap safeguards generators against payment risks. 4. **Renewable Energy Growth**: The project advances India’s goal of 500 GW renewable capacity by 2030, integrating hybrid systems with energy storage for grid stability. [https://cercind.gov.in/2025/orders/226-AT-2024.pdf](https://cercind.gov.in/2025/orders/226-AT-2024.pdf) --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)