Haryana Powers Up Renewable Energy: HERC Approves 800 MW Procurement from SJVN to Meet Growing Demand

Posted On - 5 July, 2024 • By - King Stubb & Kasiva

Summary

The Haryana Electricity Regulatory Commission (HERC) has approved a significant power purchase agreement that will bolster the state’s renewable energy capacity and address growing energy demands.[1] The decision allows Haryana Power Purchase Centre (HPPC) to procure 800 MW of renewable energy from Satluj Jal Vidyut Nigam (SJVN) Limited. This landmark deal will bring cleaner and more reliable energy to Haryana’s consumers, while also helping the state meet its renewable purchase obligations (RPOs).

Case Timeline

  • June 20, 2023: SJVN initiates a Tariff Based Competitive Bid Process for 1500 MW of firm and dispatchable renewable power (FDRE) from ISTS-connected projects with energy storage systems in India, with a GREENSHOE option for an additional 1500 MW.
  • July 15, 2023: SJVN requests a mandate from Uttar Haryana Bijli Vitran Nigam (UHBVN) for the supply of 1000 MW of RE power or round-the-clock (RTC) power as per the requirements of Haryana.
  • August 4, 2023: The 69th Standing Committee on Power Procurement (SCPP) meeting grants in-principle approval for the procurement of 800 MW of FDRE power from SJVN, subject to HERC approval.
  • November 22, 2023: SJVN informs HPPC of the discovered tariff of Rs. 4.39/kWh through an e-Reverse Auction, with the option to sell at Rs. 4.46/kWh (including a trading margin of Rs. 0.07/kWh).
  • January 2, 2024: The 71st SCPP meeting decides to negotiate the trading margin with SJVN.
  • February 23, 2024: The 73rd SCPP meeting accepts SJVN’s proposal for 800 MW of renewable energy at Rs. 4.46/kWh, subject to HERC approval.
  • March 14, 2024: SJVN offers to sell power at Rs. 4.45/kWh (Rs. 4.38/kWh discovered through e-RA + Rs. 0.07/kWh trading margin).
  • April 5, 2024: HPPC and SJVN sign a Power Sale Agreement (PSA).
  • June 6, 2024: HERC hearing takes place, where both parties reiterate their written submissions.
  • June 6, 2024: HERC issues the order approving the procurement and the PSA.

Issues Raised

The primary issues raised in this case were:

  • Approval of Source: HPPC needed HERC’s approval to procure 800 MW of firm and dispatchable renewable energy from SJVN’s ISTS-connected projects with energy storage systems.
  • Approval of PSA: HPPC sought ex-post facto approval for the Power Sale Agreement (PSA) already signed with SJVN on April 5, 2024.

Appellant’s Arguments (HPPC)

  • The power procurement aligns with the Government of India’s target of 500 GW of renewable energy capacity by 2030 and Haryana’s RPO trajectory of 43.33% by 2029-30.
  • The tariff of Rs. 4.45/kWh, including the trading margin, was discovered through a transparent competitive bidding process and is considered economical.
  • The renewable energy will help meet the growing power demand in Haryana and address the projected deficits ranging from 500 MW in 2027-28 to 6000 MW in 2037-38.
  • The hybrid power will ensure optimal cost utilization and help Discoms fulfill their RPOs.
  • The minimum capacity utilization factor (CUF) of 70% for the renewable energy offered by SJVN is equivalent to the plant load factor (PLF) of a thermal power plant, ensuring reliability.

Respondent’s Arguments (SJVN)

  • They had complied with all necessary guidelines and regulations throughout the bidding process and had obtained the requisite approvals from the Central Electricity Regulatory Commission (CERC).
  • They supported HPPC’s prayer for approval of the PSA and the scheme.

Order

HERC, after careful consideration of the arguments and submissions, granted both source approval and ex-post facto approval to the PSA. The Commission found that:

  • The procurement aligns with Haryana’s mandate to purchase renewable energy along with storage, as per the Haryana Electricity Regulatory Commission (Terms and Conditions for Tariff from Renewable Energy Sources) Regulations, 2021 (2nd Amendment) 2022.
  • The power will help meet the state’s RPOs and provide clean electricity to consumers at an affordable tariff.
  • The project is expected to contribute significantly to addressing the projected power deficits in the coming years.
  • The energy storage component will help meet peak demand and enhance grid stability.

Analysis

The HERC’s decision to approve this substantial procurement of renewable energy from SJVN represents a significant step forward for Haryana’s energy transition. It not only demonstrates a commitment to renewable energy targets but also aims to ensure a reliable and affordable power supply for the state’s consumers. By promoting the integration of energy storage, HERC is also fostering a more resilient and flexible power grid.

This approval is expected to have a positive impact on both the economic and environmental landscape of Haryana. It will contribute to the growth of the renewable energy sector, create job opportunities, and reduce the state’s carbon footprint. It also serves as an exemplary model for other states in India to adopt similar strategies in their pursuit of a cleaner and more sustainable energy future.

[1] https://herc.gov.in/WriteReadData/Orders/O20240606a.pdf