PUNJAB STATE ELECTRICITY REGULATORY COMMISSION
SCO NO. 220-221, SECTOR 34-A, CHANDIGARH
Petition No. 52 of 2013
Date of Order: 14.11.2013
In the matter of:
Petition under Section 86 (1) (b) and 86 (1) (e) and other
applicable provisions of the Electricity Act, 2003 for purchase of
electricity from solar energy generators in the State of Punjab.
AND
In the matter of:
Punjab State Power Corporation Limited, The Mall, Patiala.
AND
In the matter of:
Punjab Energy Development Agency (PEDA), Chandigarh
Present:
Smt.Romila Dubey, Chairperson
Shri Gurinder Jit Singh, Member
Order
Punjab State Power Corporation Limited (PSPCL) has filed this petition
seeking approval of the Commission to procure electricity including the tariff from
solar energy generators to be established in the State of Punjab and also to the
draft Power Purchase Agreement (PPA) to be executed with the solar energy
generators. PSPCL has submitted that Government of Punjab (GoP) has recently
issued New and Renewable Sources of Energy (NRSE) Policy, 2012, which is aimed
at the development of renewable energy sources, in particular solar energy
generation in the State of Punjab. PSPCL has further submitted that vide letter dated
26.02.2013, Punjab Energy Development Agency (PEDA) informed that the
Government of Punjab has approved installation of minimum 300 MW Solar PV
power projects in the State in the first phase.
2.
Pursuant to above, PEDA initiated competitive bidding process for inviting
generators for the establishment of 300 MW Solar PV power projects in Punjab. On
the basis of the bids received, PEDA allocated a total capacity of 250 MW Solar PV
power projects to various developers. The allocations have been made in two
categories namely (i) 1 to 4 MW (total capacity of such projects: 50 MW) and (ii) 5 to
30 MW (total capacity of such projects: 200 MW). The tariff discovered in the
competitive bidding process varies from ₹ 7.20 per kWh to ₹ 8.70 per kWh for 1 to 4
MW capacity projects and ₹ 7.67 per kWh to ₹ 8.74 per kWh for 5 to 30 MW capacity
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projects. The details of the tariffs discovered and allocations made are attached as
per Annexure-1.
3.
PSPCL has submitted that solar energy generation is expected to be one of
the sources for future renewable energy generation which can be procured in large
quantum. It has been further submitted that the solar energy generation has been
promoted in various other States and also through the policies issued by the
Government of India (GoI). On the same lines GoP has taken proactive steps to
ensure development of solar energy generation capacity and at the same time
discovered cost through the competitive bidding process. PSPCL has further
submitted that it is the distribution licensee in the State of Punjab and is required to
fulfil its minimum renewable purchase obligation (RPO) specified by the Commission
in its Regulations namely Punjab State Electricity Regulatory Commission
(Renewable Purchase Obligation and Its compliance) Regulations, 2011 (RPO
Regulations, 2011). As per these Regulations, the solar RPO for FY 2013-14 and FY
2014-15 is 0.13% and 0.19% respectively. PSPCL has submitted that the present
installed capacity for Solar PV power projects in Punjab is about 10.75 MW and with
the addition of aforementioned 250 MW capacity and another 65 MW solar capacity
in the pipeline, PSPCL would be able to comply with the solar RPO. PSPCL has
intimated that from the year 2015-16 onwards, the solar power of about ₹ 314 crore
annually would be purchased from these 250 MW capacity Solar PV power projects
at an average tariff of ₹ 8.37 per kWh.
4.
PSPCL has submitted that the total procurement as envisaged is likely to
exceed the RPO as specified presently and in the circumstances filed this petition
seeking approval for procurement of 250 MW capacity of solar energy generation in
the State of Punjab to be established by the generators as listed in Annexure-1. It
has been submitted that in terms of section 86 (1)(b) and section 86(1)(e), the
procurement of electricity including the rate is required to be approved by the
Commission. PSPCL has also sought approval of the draft PPA to be signed with the
solar power generators.
5.
In the prayer, PSPCL has requested the Commission to approve the
procurement of electricity by it from solar energy generators at the tariff discovered in
the competitive bidding process conducted by PEDA as per details in Annexure-C to
the petition and allow this power purchase cost as a pass through in the Annual
Revenue Requirement (ARR) and further requested the Commission to approve the
draft PPA, attached as Annexure-E to the petition, with or without modifications.
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6.
The petition was admitted by the Commission and PEDA was directed to file
reply by 11.10.2013 with a copy to PSPCL as per Commission’s Order dated
25.09.2013.
7.
PEDA in its response filed on 11.10.2013, while referring to Commission’s
Order dated 25.06.2013 in Petition No. 37 of 2013 (Suo-Motu), has submitted that in
line with the said Order, it invited competitive bids on the basis of discount to be
offered by the bidders on the generic tariff determined by the Commission for Solar
PV power projects. PEDA has further submitted that as per National Tariff Policy, the
RPO for Solar power is targeted at 3% in the year 2022. Therefore to achieve the
same, the per year rise on the base of RPO of 0.19% for FY 2013-14 specified by the
Commission, will be 0.4% per year for which appropriate solar power capacity
additions are required. PEDA has contended that, therefore, the addition of 250 MW
through the present bidding process is in order and will help in achieving the RPO
target in future. PEDA has further submitted that the tariff for the Solar PV power
projects arrived at through the competitive bidding process is levellised tariff and will
remain same for 25 years (term of the PPA) whereas the tariff for conventional coal
based power projects will increase every year due to rise in fuel cost and therefore at
some point of time in near future, this solar power will be cheaper than the
conventional power from coal based thermal plants. PEDA has prayed that the
prayer of PSPCL in the petition may be accepted by the Commission.
8.
In the hearing on 15.10.2013, PSPCL submitted that its prayer at Sr.No. (a)
be taken up by the Commission on priority and prayer at Sr. No. (b) may be deferred
for the time being pending resolution on deviations and variations and that PSPCL
shall file an application for this purpose. PSPCL was directed to file the said
application by 29.10.2013 with a copy to PEDA. PSPCL was further directed to file
additional submissions on the deviations/variations occurring in the draft PPA by
05.11.2013. The next date of hearing was fixed to be held on 12.11.2013. PSPCL
vide its Memo No. 6895/TR-5/539 dated 06.11.2013 sought extension for filing the
submissions by 11.11.2013.
9.
PSPCL has filed the submissions on 11.11.2013 and submitted that in order
to expedite the process of approval of procurement of electricity at the tariff
discovered in the competitive bidding process conducted by PEDA and approval of
the PPA, the present petition may be considered in two parts. Firstly for approval of
procurement of electricity at the tariff discovered in the competitive bidding process
conducted by PEDA with pass through of cost of this power through ARR of PSPCL
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and thereafter the approval of PPA to be signed by PSPCL with the project
developers. Accordingly, with regard to first part of the petition, PSPCL has prayed to
approve the procurement of electricity from solar energy generators at the tariff
discovered in the competitive bidding process conducted by PEDA as per the details
already submitted and allow the power purchase cost to be incurred by PSPCL as
pass through in the ARR of PSPCL. In the hearing on 12.11.2013 and as brought out
in its Order of even date, the Commission considered the proposal of PSPCL and
decided that Order in respect of the first part shall be issued separately. As regards
second part, PEDA was directed in the Order dated 12.11.2013 to first take up the
draft PPA with the bidders/project developers and obtain their consent/concurrence
to the variations/deviations in the draft PPA from corresponding provisions in
Request for Proposal (RfP) and Implementation Agreement (IA) and file the same
within two/three days.
10.
The Commission notes that PEDA initiated the competitive bidding process in
a transparent manner and invited bids from solar PV power project developers for
supply of electricity on the basis of discount offered by the bidders on the generic
tariff determined by the Commission for Solar PV power projects in the said Order i.e.
₹ 8.75 per kWh. The Commission further notes that the rates discovered in the
bidding process are in the range of ₹ 7.20 per kWh to ₹ 8.70 per kWh for 1 to 4 MW
capacity projects and ₹ 7.67 per kWh to ₹ 8.74 per kWh for 5 to 30 MW capacity
projects. The project wise tariff discovered is enclosed as Annexure-1 to this Order.
The Commission further notes that, as brought out by PEDA, the Solar RPO is
targeted as 3% by 2022 and would need to be enhanced by 0.4% per year from the
current level. To meet this target, about 1330 MW solar capacity is required to be
installed by 2022, considering 6% compound average growth rate of power in Punjab
i.e. on an average about 145 MW annually. Presently in its RPO Regulations, 2011,
the Commission has specified the RPO upto FY 2014-15 and accordingly, RPO
beyond this period i.e. FY 2015-16 onwards is to be fixed by the Commission. The
GoI is pressing hard to bring the solar RPO compliance in the States upto the
targeted 3% as per the Tariff Policy. Recently, Joint Secretary, Government of India,
Ministry of New and Renewable Energy vide letter dated 29.08.2013 has emphasized
to suitably fix the RPO to match the same with the Tariff Policy. Secretary,
Government of India, Ministry of New and Renewable Energy vide D.O. reference
dated 04.09.2013 has also requested the Commission for ensuring the RPO
compliance. The Commission notes that the approval granted by the GoP for
installation of minimum 300 MW solar PV power projects is a step in the right
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direction and would help the State to meet the solar RPO target from FY 2015-16
onwards. In this regard, the submission by PSPCL that they would be procuring more
solar energy than RPO requirement beyond FY 2014-15 is not tenable. The
Commission, under section 86 (1) (e) of the Electricity Act, 2003 is mandated to
promote generation of electricity from renewable sources of energy. Furthermore,
para 6.4 of the Tariff Policy provides for preferential tariff to be determined by the
Commission for renewable energy projects while para 5.2.20 of the National
Electricity Policy requires adoption of suitable promotional measures for encouraging
higher generation from renewable energy sources.
11.
Keeping in view the above, the Commission approves the procurement of
electricity by PSPCL from the solar energy generators at the tariff discovered in the
competitive bidding process conducted by PEDA as per details in the attached
Annexure-1. The cost of power purchase from the projects enlisted in Annexure-1
would be considered as pass through in the ARR of PSPCL. The tariff period for the
said projects would be twenty five (25) years as per Regulation 6(c) of the Central
Electricity Regulatory Commission (Terms and Conditions for Tariff determination
from Renewable Energy Sources) Regulations, 2012 adopted by the Commission in
its Order dated 19.07.2012 in Petition No. 35 of 2012 (Suo-Motu) with State specific
modifications. Further, the tariffs approved above would be applicable upto
31.03.2015 provided that (i) the PPAs are signed on or before 31.03.2014 and the
entire capacity covered in each PPA is commissioned on or before 31.03.2015, in
line with Regulation 8 of the said Regulations.
Sd/(Gurinder Jit Singh)
Member
Sd/(Romila Dubey)
Chairperson
Chandigarh
Dated: 14.11.2013
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Annexure-1
Solar PV power projects with capacity 1 to 4 MW
Sr.
No.
Project-1
Project
Capacity
(MW)
2
Net Tariff
Quoted
(₹/kWh)
7.20
Project-2
2
7.47
Company Name
1
WAA Solar Pvt. Ltd.
2
T R Energy & Agro Private Limited
2
7.75
3
International Switchgears Pvt. Ltd.
1
7.75
4
Aditya Media Sales Ltd., Mumbai
4
7.85
5
Shan Solar Pvt. Ltd.
1
7.89
6
Supreme Infrastructure India Ltd., Gurgaon
4
8.25
7
Azure Urja Pvt. Ltd., New Delhi
4
8.28
8
SAR Capital Pvt. Ltd.
4
8.29
9
Focal Energy Wind India Pvt. Ltd.
4
8.30
10
Atma Powers Private Limited, Muktsar
2
8.41
11
Allianz Group LLC, Ludhiana
2
8.45
12
Nexgen Solex Pvt. Ltd.
1
8.45
13
I K Energy Pvt. Ltd.
1
8.48
14
Asopus Infrastructure Limited
4
8.49
15
Abundant Ventures LLC, USA
2
8.55
16
Welspun Solar Punjab Pvt. Ltd., Mumbai
2
8.56
17
Mokia Green Energy Pvt. Ltd.
4
8.59
18
Earth Solar Pvt. Ltd.
4
8.70
Total
50
Contd....
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Solar PV power projects with capacity 5 to 30 MW
Sr.
No
1
Project
Capacity
(MW)
Net Tariff
Quoted
(₹/kWh)
Project-1
15
7.67
Project-2
15
7.97
20
7.99
Project-1
20
8.33
Project-2
10
8.42
Company Name
Azure Urja Pvt. Ltd., New Delhi
2
Solairedirect Energy India Private Limited, Pune
3
Welspun Solar Punjab Pvt. Ltd., Mumbai
4
Punj Lloyd Infrastructure Limited
20
8.49
5
Moserbaer Clean Energy Limited, New Delhi(Project-1)
15
8.52
6
Asopus Infrastructure Limited
(Project-1)
10
8.58
7
Moserbaer Clean Energy Limited, New Delhi(Project-2
15
8.63
8
Essel Infraprojects Ltd., Mumbai
10
8.65
9
Asopus Infrastructure Limited
20
8.66
10
Essel Infraprojects Ltd., Mumbai
20
8.70
11
Lanco Solar Energy Private Limited, Gurgaon
10
8.74
(Project-1)
(Project-2)
(Project-2)
Total
200
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