Bihar Electricity Regulatory Commission (BERC) has approved the state Discoms plan to purchase 450 MW solar power from central nodal agencies. NTPC and SECI will respectively sell 300 MW and 150 MW of solar power to the Discoms. NTPC will procure the 300 MW power from SB Energy Six Private Limited at INR 2.60 per unit while SECI will procure 150 MW at INR 2.44 per unit from ACME Solar. The solar tariffs are inclusive of safeguard duty implications. Central Electricity Regulatory Commission (CERC) has already adopted these tariffs. Unfortunately, ACME has recently decided to pull out of the project due to ‘Force Majeure’.
Case Background And Renewable Purchase Obligation Set By BERC
For regulatory approval to purchase solar quantum, Bihar State Power Holding Company (BSPHCL) on behalf of North Bihar Power Distribution Company Limited (NBPDCL) and South Bihar Power Distribution Company Limited (SBPDCL) had filed two petitions before BERC- for power purchase each from SECI and NTPC.
The state regulatory commission has set the below RPO trajectory for Bihar Discoms. Due to the lack of enough RE resources, the Discoms fail to meet their targets.
For each financial year, the Solar RPO translates to 1008.14 MUs, 1658.75 MUs and 2584.2 MUs respectively. These figures are the volume of solar energy that Bihar Discoms should procure in order to meet their Solar RPO. The challenge with the state is that only 198 MUs of solar capacity is available. Therefore the deficit exists and has to be closed. Meeting higher RPO will also save the state Discoms from incurring additional expenditure on purchase of Renewable Energy Certificates (RECs).
Power Sale Agreement
NTPC and SECI (traders) have executed a Power Sale Agreement (PSA) with the Discoms. As per the arrangements, they will procure the power by entering into Power Purchase Agreements (PPAs) with the successful bidders with back-to-back PSAs for sale of power to the Discoms. The trading margin will not exceed INR 0.07 per unit. Therefore the solar tariffs as per the PSA will not exceed INR 2.67 per unit for NTPC and INR 2.51 per unit for SECI.
BERC Also Cautions About The Addition Of Renewable Energy Sources
BERC notes that Bihar has a dearth of renewable power capacities. It is in the best interest of the state to procure renewable energy from other states.
While approving the order the regulatory commission also notes that the state Discoms are saddled with excess contracted capacities- especially from thermal power plants- due to sluggish demand. If they remain unutilised, the fixed cost of unscheduled power will be loaded on consumers’ bills. In such a scenario adding further capacities will only worsen the situation. Therefore Discoms should judiciously use those excess capacities and ensure affordable quality supply of power to the consumers while meeting their own RPOs in a timely manner.
In the wake of PPA termination by ACME, it is likely that BERC may have to revise the order.
Feature Image Credit: pxfuel