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4

Contents

1. Tenders | 5New RFS Issued | 5 Re-Tendered | 8Date extension | 8 Auctions Completed | 9

2. Installed Capacity | 10

3. Investments/ Deals | 13

4. Monthly Import-Export Statistics | 15

5. Module Price Trends | 16

6. Policy and Regulation | 17

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Tenders

• About 1046 MW of renewable tenders were issued in February 2021

• Auctions were completed for 6895 MW of solar projects. Maximumcapacity of 3150 MW was won by Adani alone.

New RFS Issued

1.

Fig 1.1: Details of new tenders issued in February 2021

0 100 200 300

MES, 1 MW, Solar Power Plant, Hisar, Haryana

TANGEDCO, 1MW, Solar, Tamil Nadu

CCMC, 2MW. Solar, Tamil Nadu

NVVNL, 2 MW, Solar, Agartala Airport, Tripura

NOIDA, 2.6 MW, Rooftop Solar

WBPDCL, 5 MW, Floating Solar, West Bengal

HPGCL, 6 MW, Solar, Chandpur, Faridabad, Haryana

JREDA, 7 MW, Rooftop Solar, Jharkhand

WBREDA, 9.9 MW, Rooftop Solar, West Bengal

HPGCL, 10 MW, Solar, Jhajjar, Haryana, Feb 2021

BHEL, 10 MW, Solar, (WBSEDCL) West Bengal

TSCL, 20 MW, Floating Solar, Karnataka

APGCL, 25 MW, Solar, Namrup Thermal Station, Assam

NHPC, 25 MW, Floating Solar, Madhya Pradesh

EESL, 70 MW, Solar Power Project, Goa

CESL, 100 MW, Solar, Maharashtra

KSEB, 200 MW, Rooftop Solar, Kerala

UPNEDA, 275 MW, Solar, Uttar Pradesh

NTPC, 300 MW, Solar, Gujarat

Capacity (MW)

5000

Source: JMK Research

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Table 1.1: New RFS issued

Tender Name Technology Tender Scope

Capacity (MW)

Other Details

Commis-sioning timeline

from PPA

signing

Bid Submission

Date

NTPC, 300 MW, Solar, Gujarat, Feb 2021

Utility Scale Solar

EPC 30012

months16th-Mar

UPNEDA, 275 MW, Solar, Uttar Pradesh, Feb 2021

Utility Scale Solar

Project De-velopment

27515

months1st-Mar

KSEB, 200 MW, Rooftop Solar, Kerala, Feb 2021 Rooftop Solar 200

EMD - INR 100/- per kWp of quoted capacity, subject to maximum of INR 1 million

3 months 8th-Mar

CESL, 100 MW, Solar, Maharashtra, Feb 2021

Utility Scale Solar

EPC 100 17th-Mar

EESL, 70 MW, Solar Power Project, Goa, Feb 2021

Utility Scale Solar

EPC 70Performance Security - 10% of the contract price

6 months 26th-Feb

NHPC, 25 MW, Floating Solar, Madhya Pradesh, Feb 2021

Floating Solar

EPC 2512

months18th-Feb

APGCL, 25 MW, Solar, Namrup Thermal Station, Assam, Feb 2021

Solar EPC 25EMD - INR 20 million PBG - 10% of the EPC Contract

12 months

26th-Mar

TSCL, 20 MW, Floating So-lar, Karnataka, Feb 2021

Floating Solar

Project De-velopment

20 EMD - INR 9.8 million24

months5th-Apr

BHEL, 10 MW, Solar, (WB-SEDCL) West Bengal, Feb 2021

Utility Scale Solar

O&M 10 EMD – INR 0.227 million 2nd-Mar

HPGCL, 10 MW, Solar, Jhajjar, Haryana, Feb 2021

Utility Scale Solar

EPC 10

EMD - INR 10 million/MW PBG - Haryana Based firm - @2% of the contract value Other states or UTs based firm - @3% of con-tract value

6 months 24th-Mar

WBREDA, 9.9 MW, Rooftop Solar, West Bengal, Feb 2021

Rooftop Solar 9.9EMD – INR 2.8 million, PBG – 10% of the tendered value

23rd-Apr

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Tender Name Technology Tender Scope

Capacity (MW)

Other Details

Commis-sioning timeline

from PPA

signing

Bid Submission

Date

JREDA, 7 MW, Rooftop So-lar, Jharkhand, Feb 2021 Rooftop Solar 7

EMD - INR 0.208 million PBG - 5% of the allotted work order

6 months 1st-Mar

HPGCL, 6 MW, Solar, Chan-dpur, Faridabad, Haryana, Feb 2021

Utility Scale Solar

EPC 6 EMD - INR 6 million 6 months 24th-Mar

WBPDCL, 5 MW, Floating Solar, West Bengal, Feb 2021

Floating Solar

Project De-velopment

5 EMD – INR 7 million 9 months 12th-Apr

NOIDA, 2.6 MW, Rooftop Solar, Feb 2021 Rooftop Solar RESCO 2.6

EMD – INR 2.04 million, MSMEs sector exempted from paying EMD

6 months 11th-Mar

NVVNL, 2 MW, Solar, Agartala Airport, Tripura, Feb 2021

Small Scale Solar

2 22nd-Feb

CCMC, 2MW. Solar, Tamil Nadu, Feb 2021

Small Scale Solar

2 EMD – 0.9 million 7th-Apr

TANGEDCO, 1MW, Solar with a 1 MW/3 MWh BESS, Tamil Nadu, Feb 2021

Solar + BESS 1 EMD – 0.1 million 24th-Mar

MES, 1 MW, Solar Power Plant, Hisar, Haryana, Feb 2021

Small Scale Solar

1EMD - INR 0.625 million, PBG - 5% of the contract sum

12 months

15th-Mar

PBG: Performance Bank guaranteeEMD: Earnest Money Deposit

Source: Industry news articles, JMK Research

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Date Extension

Tender Name Technology Tender Scope Capacity (MW)

Commission-ing timeline

from PPA Signing

Bid Sub-mission

Date

SECI, 50 MW, Solar PV and Agro PV, Tamil Nadu, Jan 2021

Solar and Agro PV

ProjectDevelopment

Solar PV – 40 MW Agro PV – 10 MW

12 months 15th-Mar

SECI, 20 MW, Solar with 20 MW/50 MWh BESS Leh Dec 2020 Solar + BESS EPC 20 10th-Mar

SECI, 15 MW, Floating Solar, Bilaspur, Himachal Pradesh, July 2020

Floating Solar

Project Development

15 18 months 17-Mar-2021

Table 1.3: Date Extension

Source: Industry news articles, JMK Research

Tender Name TechnologyTender Scope

Capacity Other DetailsCommis-sioning timeline

Bid Submission

Date

EESL, 279 MW, Solar, Maharashtra, Aug 2020

Utility Scale Solar

EPC 279 EMD - INR 193 million 19th-Mar-2021

HPGCL, 20 MW, Solar, Old Ash Dyke, Faridabad, Haryana, Feb 2021

Utility Scale Solar

EPC 20

EMD - INR 20 million PBG -• Haryana Based firm @2%

of the value of contract• Other states or UTs based

firm @3% of the value ofcontract

6 months 24th-Mar-2021

WBPDCL, 10 MW, Floating Solar, West Bengal, March 2020

Floating Solar

EPC 10EMD - INR 12 million Performance Security - 10% of LOA

12 months 31st-Mar-2021

Re-Tendered

Table 1.2: Re-tendered

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Table 1.4: Auctions completed

Auctions Completed

Source: Industry news articles, JMK Research

Tender Name StatusCapacity tendered

(MW)

Capacity allotted

(MW)

Commis-sioning timeline

from PPA Signing

Bidder Details

APGECL, 6400 MW, Solar, Andhra Pradesh, Dec 2020

Auction Completed

6400 6400 21 months

• Torrent Power - 300 MW (INR 2.47/kWh)• Shirdi Sai Electricals - 1800 MW (INR 2.48/

kWh)• NTPC - 600 MW (INR 2.48/kWh)• Adani -2400 MW (2.49/kWh)• Shirdi Sai Electricals - 400 MW (INR 2.49/

kWh)• HES Infra - 300 MW (INR 2.49/kWh)• Adani - 600 MW (INR 2.58/kWh)

Torrent Power, 300 MW, Grid-Connected Solar PV, Gujarat, Dec 2020

Auction Completed

300 300 18 months• Adani - 150 MW (INR 2.22/kWh)• Torrent Power Generation - 150 MW (INR

2.22/kWh)

NTPC, 190 MW, Grid-con-nected Solar PV, Rajasthan, Jan 2021

Auction Completed

190 190 10 months Rising Sun Energy - 190 MW (INR 2.25/kWh)

SECI, 5 MW, Solar, Tamil Nadu, EPC, July 2020

Auction Completed

5 5 9 months U-Solar

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Fig 2.1: Solar and Wind installations in January 2021 - 1489 MW

Fig 2.2: State wise Installed capacity in January 2021

Installed Capacity2.S

ou

rce: M

NR

E, JM

K R

ese

arch

In January 2021, a total of 1489 MW of solar and wind capacity was added, taking the cumulative RE capacity to 92.6 GW as on January 31st, 2021.

Maharashtra and Uttar Pradesh added maximum solar capacity whereas Gujarat had the highest wind installation (52 MW).

Bio P

ower Small Hydro

Wind

S

olar

42%

4

2 %

11%

5%

100%= 92.6 GW

0

300

600

900

1200

1500

WindSolar

Cap

acity

(MW

)

Cumulative Installations Capacity installed in January 2021

Inst

alle

d C

apac

ity (M

W)

Utility scale Solar Wind

0

50

100

150

200

250

300

350

400

OthersRajasthanKarnatakaAndhra Pradesh

GujaratUttar Pradesh

Maharashtra

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Table 2.1: List of recently commissioned projects

Project Developer Name TechnologyCapaci-ty (MW)

StateMonth of

Commissioning

Adani Green Energy Solar 100 Uttar Pradesh Feb-21

Sprng Energy Solar 98 Andhra Pradesh Feb-21

Hinduja Renewables (Ashok Leyland)Open access

solar75 Tamil Nadu Feb-21

Pennar Industries Ltd Solar 24.7 Uttar Pradesh Feb-21

Waaree

Solar (Under Solar Agriculture

Feeder Pro-gramme)

16 Maharashtra Feb-21

AMP EnergyOpen access

solar14 Uttar Pradesh Feb-21

AMP Energy Solar (behind the

meter)7.805 Telangana Feb-21

NTPC Solar 5 Uttar Pradesh Feb-21

Source: Industry news articles, JMK Research

Recently Commissioned Projects

12

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Table 3.1: Investment and deals in February, 2021

Company Name Deal Type SectorAsset ac-

quiredInvestor

Deal Value

Stakes Ac-

quired

Prathama Solarconnect Energy Pvt. Ltd. (PSEPL)

Equity Solar Ashoka Leyland $ 2.56 million

26%

NVNR (Ramannapet I) Power Plant Pvt Ltd and NVNR (Ramannapet II) Power Plant Pvt Ltd

Acquisition Solar15 MW

(Group Cap-tive projects)

Aurobindo Pharma

$ 1.48 million

26%

DIN Engineering Services AcquisitionRooftop

SolarEnphase Energy

Investments/ Partnerships3.

Source: Industry news articles, JMK Research

Brookfield, two others bid for Fortum’s assets

Canada’s Brookfield Asset Management Inc., private equity firm Actis Llp and Edelweiss Infrastructure Yield Plus Fund’s Sekura Energy Ltd have offered to buy a majority stake in Finnish state-run power utility Fortum Oyj’s 500 megawatts (MW) solar projects in India in a deal estimated at about half a billion euros, said two people aware of the development.

SHV, NIIF look to buy stake in Fourth Partner Energy

Netherlands’ SHV Energy and India’s quasi-sovereign wealth fund National Investment and Infrastructure Fund (NIIF) are separately looking to buy a stake in Hyderabad-based Fourth Partner Energy (4PEL) for about $150 million. Fourth Partner Energy focuses on the commercial and industrial (C&I) segment and has an operational portfolio of 400MW. It is building solar parks in Uttar Pradesh, Maharashtra and Tamil Nadu.

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Brookfield nears deal for Mahindra’s EPC biz, solar units

Valuations have started to recover in India’s green energy space to pre-covid levels. Canada’s Brookfield Asset Management Inc. has signed an exclusivity agreement to buy Mahindra Susten’s engineering, procurement and construction (EPC) business, besides 1,200 MW of solar assets, at an enterprise value of around ₹5,000 crore, two people aware of the development said. Mahindra Susten was earlier running two separate programmes to divest its assets—one comprising the sale of 600MW under-construction solar projects and the EPC business that was managed by EY. Rothschild was handling a separate sale of its operational 600MW solar assets.

ReNew Power to merge with RMG for US listing

Goldman Sachs-backed ReNew Power became the first renewable company from India to reverse merge with a US listed blank cheque financier also known as special purpose acquisition companies (SPAC), RMG Acquisition Corp II, at $4.4 billion post-money valuation, excluding debt.

O2 Power to buy stake in Hero Future Energies’ Rajasthan SPV

O2 Power, promoted by European alternative asset manager EQT and Temasek, is acquiring a 49% stake in Hero Future Energies Pvt. Ltd’s special purpose vehicle (SPV)--Clean Solar Power Bhainsada--that is setting up a 250 MW solar capacity in Rajasthan. The PPA for this projects is with SECI for 25 years at Rs 2.53/ unit tariff.

Amplus eyeing Renew’s solar rooftop portfolio

Amplus Energy Solutions Pvt. Ltd is in talks to acquire Goldman Sachs-backed ReNew Power’s rooftop solar portfolio of 140 MW

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Monthly Import/ Export Trends4.Compared to November 2020, solar imports have increased by nearly 10% while exports have fallen by 67% in December 2020. Compared to previous year, on a YoY basis, both solar imports and exports have declined by 69% and 97% respectively in 2020.

Fig 4.1: Exports - Imports trend

Source: Ministry of Commerce, JMK Research

5000 0 5000 10000 15000 20000

Jun-19

Jul-19

Aug-19

Sep-19

Oct-19

Nov-19

Dec-19

Jan-20

Feb-20

Mar-20

Apr-20

May-20

Jun-20

Jul-20

Aug-20

Sep-20

Oct-20

Nov-20

Dec-20

Amount (INR million)

Exports Imports

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Module Price Trends5.Solar cells and modules - Price trends

Compared to January 2021, prices of global multi crystalline modules and mono PERC modules have remained the same in February 2021. Compared to previous year, on a YoY basis, prices of global multi crystalline modules and mono PERC modules have declined by 12% and 11% respectively.

Fig 5.1: Solar Cells and Module price trends

Source: PVInfoLink, JMK Research

0.15

0.16

0.17

0.18

0.19

0.20

0.21

0.22

0.23

0.24

0.25

Mono PERC modules (Global)

Multi crystalline module (Global)

Mono PERC modules (India)

Feb-21

Jan-21

Dec-20

Nov-20

Oct-20

Sep-20

Aug-20

Jul-2

0

Jun-20

May-20

Apr-20

Mar-20

Feb-20

Jan-20

Pri

ces

(USD

/Wp

)

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Policies and Regulations6.CERC Adopts Competitive Bidding Tariff of Rs.2.54/kWh for 1,150 MW, filled by SECI

• SECI had filed a petition before the Commission to adopt a tariff ofRs.2.54 /kWh for 1,150 MW of solar power projects (Tranche IV) se-lected through a competitive bidding process. It had also sought atrading margin of Rs.0.07/kWh.

• SECI had issued a request for selection to set up 1,200 MW of inter-state transmission system (ISTS)-connected solar power projects(Tranche IV) in February 2019. Seven bids were received for an ag-gregate capacity of 2,100 MW. Six bids with an aggregate capacityof 1,800 MW were shortlisted for the e-reverse auction. After thee-reverse auction, SECI had agreed to sell the entire 1,150 MW of solarpower to the distribution licensees at the discovered rate of Rs.2.54/kWh and a trading margin of Rs.0.07/kWh.

• On July 25, 2019, SECI had issued letters of award (LoA) to ReNew So-lar Power, Azure Power, and Ayana Renewable for 300 MW each, andMahindra Susten for 250 MW.

• CERC after scrutiny noted that SECI was required to procure powerby entering into PPAs with the successful bidders with back-to-backpower sale agreements (PSAs) to sell power to the distribution licen-sees.

• After issuing the LoAs to the four companies, SECI entered into PSAswith Haryana Power Purchase Center and Madhya Pradesh PowerManagement Company.

• The regulator said that SECI had carried out the bidding processas per the guidelines, and the tariff of Rs.2.54/kWh was discoveredthrough a transparent process.

• Central Electricity Regulatory Commission (CERC) has adopted thetariff of Rs.2.54 /kWh for 1,150 MW of solar projects allocated to Re-New Solar Power (300 MW), Azure Power (300 MW), Ayana Renewa-ble (300 MW), and Mahindra Susten (250 MW).

Central

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CERC Denies ReNew Plea to Transfer Connectivity & LTA to its Subsidiaries

• ReNew Sun Waves, a subsidiary of ReNew Power had filed a petitionseeking directions from the Commission to address certain problemsbeing faced in implementing the PPA. It had also asked for connec-tivity between the two wholly-owned subsidiaries to be allowed,given that the parent company owned more than 50% of the votingshares of such company or the right to appoint majority directors.

• ReNew Sun Waves submitted that the competitive bidding guide-lines allow the successful bidder to transfer 49% of its shareholding inthe special purpose vehicle (SPV), executing the PPA to a third-partyat any time without approval of the procurers. However, to transfermore than 49% of its shareholding in such SPV, prior approval of theprocurers was required if such transfer of shareholding is at any timebefore the expiry of one year from the commercial operation date(CoD).

• On 10 January, 2019, SECI invited proposals for setting up grid-con-nected solar power projects on a ‘Build, Own, and Operate (BOO)’basis for an aggregate capacity of 1,200 MW. The request for selection(RfS) contained the model PPA and PSA, which were prepared perthe competitive bidding guidelines.

• Based on a reverse bidding process, ReNew Sun Waves was declaredas one of the successful bidders. On 5 March, 2019, SECI issued aLetter of Award (LoA) for the supply of 300 MW power, in favor of oneof ReNew Sun Waves’ wholly-owned subsidiaries. Subsequently, on13 August, 2019, ReNew Sun Waves and SECI executed a PPA for thesupply of 300 MW power for 25 years.

• The Central Electricity Regulatory Commission (CERC) dismissed asolar developer’s plea to allow utilization of connectivity and long-term access (LTA) to its two wholly-owned subsidiaries and said thatit was not permitted.

• CERC said there was no provision regarding the transfer of connectiv-ity or LTA in the connectivity regulations 2009.

• CERC after scrutiny said that the petitioner should have noted the ap-plicable regulations governing connectivity and LTA while participat-ing in the bidding process. Not having done so, after being declareda successful bidder, it cannot seek that certain provisions of regula-tions should be favourably amended to benefit the developer.

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MNRE Denies Additional Five-Month Commissioning Date Extension for Renewable Projects

• Ministry of New and Renewable Energy (MNRE) with its notificationdated 9th Feb, 2021 has issued a notification denying requests foranother five-month extension for commissioning renewable energyprojects, stating that these extensions would not be granted in a rou-tine manner going forward.

• The MNRE said it received requests for another five-month extensionfor renewable projects commissioning on top of its previous five-month extension between 25th March, 2020, and 24th August, 2020,amid the COVID-19 induced lockdown.

• It had previously issued directions to treat the lockdown as a forcemajeure event and instructed all renewable project implementingagencies to give renewable projects under development a five-month commissioning date extension. The Ministry gave this exten-sion without any case-to-case examinations and without the need forsubmitting any documentary evidence.

• However, in its latest notification, the MNRE said that even thougha blanket extension was provided previously, any further extensionsmay only be granted by implementing agencies in exceptional cases.They are allowed to grant an extension only after conducting due dil-igence and carefully considering the specific circumstances relevantto each case.

APTEL Provides Interim Relief to Developers in the Scrapped GUVNL 700 MW Solar Auction

• APTEL has directed the Gujarat Urja Vikas Nigam Limited (GUVNL) toextend the validity of bids placed by developers in its scrapped 700MW solar auction by two weeks.

• SJVN Limited, Tata Power, TEQ Green Power (a subsidiary of O2Power), and Vena Energy Renewables had filed petitions with APTELseeking relief following GUVNL’s decision to reissue its 700 MW solartender. The developers had given GUVNL the option to keep bidsvalid for one week until APTEL decided.

• In GUVNL’s auction for 700 MW of solar projects at the Dholera solarpark (Phase IX), Vena Energy Renewables and Tata Power quoted atariff of Rs.2.78 /kWh for 100 MW of projects each. ReNew Solar quot-ed Rs.2.79 /kWh for 200 MW, and SJVN quoted Rs.2.80 /kWh for 100

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MW. TEQ quoted Rs.2.81/kWh for 500 MW of projects but was award-ed only 200 MW under the bucket filling method.

• However, the Gujarat Electricity Regulatory Commission (GERC)had allowed GUVNL to cancel the auction and retender it to discovera lower tariff for the projects.

• The industry severely criticized this move since the tender wasscrapped over five months after the auction was concluded andletters of award were issued. The state DISCOM wanted to discoverlower tariffs in another auction.

• APTEL directed the state distribution company (DISCOM) not toallocate the capacities awarded to the developers to third parties if itdecided to float the 700 MW tender again.

MERC Asked SECI to Compensate MSEDCL for Delay in Commissioning Solar Projects

• MERC directed SECI to compensate MSEDCL for the short supply ofenergy due to which it had look to other sources to fulfil its RPO.

• SECI carried out two separate bids for selecting solar power develop-ers for 500 MW projects in each case to be set up in Maharashtra forsale to MSEDCL based on the Request for Selection (RfS) dated 27August, 2015, and 24 February, 2016.

• SECI and MSEDCL entered into two PSAs on 4 November, 2016, and1 December, 2016, with SECI having to sell solar power to MSEDCL bybuying the same from the selected developers.

• The commissioning dates for Batch-III projects was 10 May,2017, forthe open content category (450 MW) and 16 August, 2017, for the do-mestic content requirement (DCR) category (50 MW).  The commis-sioning date for 500 MW Batch-IV projects was 23 December, 2017.The agreed capacity of power to be sold by SECI to MSEDCL underboth the PSAs was 500 MW each, respectively.

• SECI started supplying power to MSEDCL from June 2017 in a phasedmanner. However, some of the projects that SECI had tied up for weredelayed, leading to a shortfall in supply of power as agreed under thePSA executed between MSEDCL and SECI.

• SECI submitted that the delay in commissioning and commercial op-eration of the developers’ solar projects led to a delay in commence-ment of supply of power for reasons not attributable to SECI. It saidthat there was no avenue available for MSEDCL to seek a reduction in

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the applicable tariff of Rs.4.50/kWh.

• MSEDCL had filed a petition with MERC seeking compensation asper PSA executed with SECI and compensation on account of the de-lay in the project’s commercial operation date (COD) as per the PPAwith the project developers.

• After going through all the facts, the Commission said, MSEDCL mayrevise its claim for the short supply of energy by considering only theperiod post the COD of the projects.

• The Commission observed that to make timely payments to the de-velopers, NSM guidelines had specified the development of a ‘Pay-ment Security Fund.’ Accordingly, money received from encashmentof bank guarantee has to be deposited into this fund.

• Therefore, MSEDCL cannot claim such an amount from SECI. Howev-er, MNRE has specified a ceiling limit of such fund, i.e., three monthsof payments to the projects set up under the guidelines. Once thelimit is reached, the benefit of any subsequent encashment of thebank guarantee would need to be passed on to MSEDCL. To enableMSEDCL to claim such benefit, SECI is directed to provide details ofthe fund created, its ceiling level considering 3 months payment tothe project, and details of the bank guarantee enchased. Based onsuch details, if applicable, MSEDCL may claim amount received bySECI towards encashment of the bank guarantee.

• MERC has directed SECI to return the money if the bank guaranteewas encashed after creating the payment security mechanism. Italso asked SECI to reimburse the money accrued following the tariffreduction due to delay in commissioning of the projects.

MNRE Restricts Incentives to Rooftop Solar Systems Connected to the Grid

• MNRE in the new guidelines for the Phase II of the solar rooftop pro-gram, has said that the implementing agency should assign a mini-mum of 10% of the total allocated quantity to the lowest bidder. If thevendor does not execute the allocated quantity, the bank guaranteewill be encashed, and the vendor blacklisted for five years.

• This new clause will be applicable for all future tenders and tenderswhich have already been floated, with the bid submission scheduledon or after 6 March 2021.

• MNRE clarified that only the grid-connected rooftop solar systemsinstalled in the area of the DISCOM would be considered for the cal-

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culation of incentives. The incentives will be disbursed based on the applicable benchmark cost issued by MNRE for the capacity of above 10 kW up to 100 kW or the lowest cost discovered in the auctions for that state or union territory, whichever is lower.

• MNRE has also specified that the benchmark cost applicable at thetime of issuance of the letter of award (LoA) or the empanelment ofvendors will be used to calculate CFA for the project completed with-in the sanctioned timeline.

• For projects completed during an extended timeline, CFA will be cal-culated based on 95% of the applicable benchmark cost or 95% of thetendered cost, whichever is lower.

• DISCOMs should provide details of grid-connected rooftop solarsystems installed behind the meter in the area separately. On receiptof the details, the incentive amount for respective DISCOMs will becalculated.

CERC issued Revised Grant of Connectivity Guidelines for ISTS-Connected Renewable Projects

• According to these revised guidelines for grant of interstate trans-mission system (ISTS) connectivity to renewable energy projects, theprocedure will apply to central transmission utility (CTU), regionalload dispatch centers (RLDCs), state load dispatch centers (SLDCs),state transmission utility, concerned distribution companies (DIS-COMs), and implementing agencies.

• Applicants whose generation capacity is already connected to thegrid or for which connectivity is already granted cannot apply for ad-ditional connectivity for the same generation capacity. A new appli-cation for additional generation capacity should be submitted.

• Applicants who have been granted connectivity to ISTS for the gen-eration projects based on a particular renewable energy source maygrant, for the same generation capacity, change to another renewa-ble source after intimating the CTU.

• As per the revised procedure, in cases where subsidiary companieshave been allowed to utilize the connectivity granted to the parentcompany, the connectivity grantee will be responsible for the gener-ating station’s operational and commercial obligations.

• CTU will grant Stage-I connectivity within 60 days of the month lastdate in which the application was submitted. If capacity which hasbeen granted becomes unavailable at a later stage for Stage I, an

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23

alternative location will be allocated at Stage-II connectivity.

• Stage II connectivity will be granted to an entity that has been issuedthe LOA or has entered into a power purchase agreement with a re-newable energy implementing agency or a distribution licensee.

• CERC also said that renewable hybrid generating projects, includinground-the-clock hybrid projects, will be eligible for separate stage-IIconnectivity for each location based on the same PPA.

• Stage-II Connectivity grantees will be required to complete the ded-icated transmission lines and generator pooling sub-stations on orbefore the project’s SCOD or as delayed commissioning permittedby the implementing agency and if the grantee fails to do so, Stage-IIconnectivity will be revoked.

• As per the revised regulations, the generator pooling station’splanned capacity should be less than the dedicated transmissionline’s capacity .The minimum aggregate evacuation capacity of thegenerator pooling station should not be less than 100 MVA.

• In case the CTU finds that the dedicated transmission infrastruc-ture is under-utilized, it may seek an explanation from the Stage-IIconnectivity grantee. If the spare capacity is not being used withoutreasonable justification, then it would be brought to the notice of theCERC.

In Another Bad Precedent, Gujarat Regulator Allows DISCOM to Scrap 700 MW Solar Auction

• GUVNL had filed a petition with the Commission seeking approval forinitiating a separate retendering process for the 700 MW of the 1 GWof projects previously tendered in light of recent price trends. Theseprojects were yet to be tied up and did not have a ceiling tariff.

• It said it had floated a tender to purchase solar power from 1 GW ofsolar projects in 2019. The tender received bids for only 300 MW ofprojects – 250 from Tata Power and 50 MW from Gujarat IndustriesPower Company Limited. Tata Power had quoted a tariff of Rs.2.75 /kWh, and GUVNL subsequently issued a letter of award only to themas they were the lowest bidder.

• The remaining 750 MW was reissued, but the tender only receivedbids for 50 MW from Tata Power again. GUVNL issued the LOA forthis, as well. The distribution company (DISCOM) stated that 700 MWof capacity in the Dholera Solar Park remained unallocated. Follow-

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ing this, the DISCOM raised the ceiling tariff for these projects from Rs.2.75 /kWh to Rs.2.92 /kWh, hoping to attract more bidders.

• In the auction for the reissued tender, Vena Energy Renewables andTata Power quoted a tariff of Rs.2.78 /kWh for 100 MW of projectseach, ReNew Solar quoted Rs.2.79 /kWh for 200 MW, and SJVN quot-ed Rs.2.80 /kWh for 100 MW.TEQ quoted Rs.2.81/kWh for 500 MWof projects but was awarded only 200 MW under the bucket fillingmethod.

• However, GUVNL reviewed the auction in light of the recently discov-ered record-low Rs.1.99 /kWh tariff in its auction for 500 MW of solarprojects (Phase XI) in December 2020. GUVNL believed that the rea-son for the low tariff was the significant drop in capital cost and otherexpenses for solar projects.

• GUVNL noted that a tariff between Rs.2.78 /kWh and Rs.2.81/kWhcould impose significant financial strain on the DISCOM and con-sumers. It proposed retendering for the 700 MW of projects sincepower purchase agreements were yet to be approved by the Com-mission.

• GERC stated that the DISCOM had abided by the regulations, con-sulted the state government as it should have, and sought its con-sent before retendering the projects. It opined that this clearlyappears to be for the public good and common good, the ultimatebeneficiary is the public at large if the lowest tariffs are found.

• GERC allowed the projects to be retendered and said that GUVNLcould approach it for tariff adoption after conducting the biddingprocess again

Haryana approved Levelized Tariff of Rs.2.48/kWh for Amplus 50 MW of Solar Projects

• Haryana Electricity Regulatory Commission (HERC) has approved atariff of Rs.2.48 /kWh for 50 MW of Amplus Sun Solutions solar pow-er projects in Bhiwani, Haryana, after re-examining the capital costcomponent of the developer submission.

• Amplus filed a petition with HERC for determining a tariff for its solarprojects. To allow the people to participate in the proceedings, Am-plus published the petition in a public notice in newspapers. They in-vited objections, comments, or suggestions from the general publicand stakeholders. It received feedback from seven parties, includingthe Haryana Power Purchase Center (HPPC).

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• HPPC raised questions about the capital costs quoted by the devel-oper. It particularly found the project, machinery, and civil cost com-ponents of Rs. 389.1 million incurred by the developer to be substan-tial and “unbelievable.”

• HERC took note of HPPC submission while observing that capitalcosts vary from state to state. It further observed that Amplus hadclaimed the capital cost against a DC capacity of 75 MW instead ofthe contracted AC capacity of 50 MW.

• It cited a previous petition where the Central Electricity Regulato-ry Commission declared that capital cost must be set based on ACcapacity and not DC capacity since some developers deploy addi-tional modules to optimize the project’s performance and inverters,in particular. This way, additional power is generated from the extramodules, which results in higher earnings from the feed-in-tariff. TheHERC subsequently computed the capital cost components basedon 50 MW of projects instead of 75 MW and used this to determinethe tariff.

• HERC also stated that Amplus quoted capital cost of Rs.2.75 billion orRs.55.08 million /MW was not justifiable and that it would not consid-er this while determining the tariff. It approved a total capital cost ofRs.1.91 billion for the 50 MW project or Rs.38.25 million/MW. It notedthat while this was still on the higher side, it was still reasonable giv-en the developer’s proposal to consider a CUF of 25.91%.

• Based on this capital cost and the other cost components submit-ted by the developer, the Commission arrived at a project-specificlevelized tariff of Rs.2.48 /kWh for the 50 MW of projects.

PSERC Approved 500 MW Solar-Wind Hybrid Power Procure-ment from SECI at Rs.2.69/kWh

• Punjab State Electricity Regulatory Commission (PSERC) with itsOrder dated 1 Feb, 2021 approved the procurement of 500 MW ofsolar-wind hybrid power from the Solar Energy Corporation of India(SECI) at a tariff of Rs.2.69/kWh with a trading margin of Rs.0.02/kWh. PSERC directed the Punjab State Power Corporation Limited(PSPCL) to execute the amended power sale agreement (PSA) at theapproved tariff and trading margin.

• PSPCL had filed a petition for approval of procurement of 500 MW ofhybrid power from SECI on a long-term basis. It had also requestedthe Commission to approve the trading margin of Rs.0.02/kWh.

• PSERC noted that in the PSA signed on 3 March, 2020, the trading

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margin was mentioned as Rs.0.07/kWh, whereas in the petition, PSPCL requested to approve a trading margin of Rs.0.02 /kWh. The Commission said there was no need to deliberate upon the tariff as it had already been approved by the Central Electricity Regulatory Commission (CERC) at Rs.2.69 /kWh.

• PSERC noted that CERC had approved the tariff of Rs.2.69 /kWhbased on competitive bidding. At the same time, it had not approvedthe trading margin of Rs.0.07 /kWh and held that the trading marginshould be mutually decided.

• It observed that the obligation to maintain the payment securitymechanism by SECI for the hybrid power developer was subject toopening the Letter of Credit by PSPCL. It was not the obligation ofSECI.

• PSERC stated regarding SECI’s contention that it had to develop solarprojects in remote areas like Lakshadweep and Andaman & Nicobar,for which it required revenue to meet its financial requirements fromthe trading margin, the Commission noted that this activity wasdistinct from the trading activity of SECI. Such activities cannot befunded through trading margin chargeable to PSPCL and in-turn theconsumers of Punjab.

• PSERC after scrutiny felt that there was no reason to keep the tradingmargin higher than Rs.0.02/kWh. The Punjab electricity regulator ob-served that the power procurement being hybrid in nature will helpPSPCL fulfil its RPO.

MPERC Determines Levelized Tariff of Rs. 3.07/kWh for PM- KUSUM Component A Projects

• Madhya Pradesh Electricity Regulatory Commission (MPERC) has seta pre-fixed levelized tariff of Rs.3.07 /kWh under Component A of the(PM- KUSUM) program for the entire life of projects commissioneduntil 31 March, 2024.

• The pre-fixed levelized tariff would be the ceiling tariff for the com-petitive bidding process. The PPA will be for 25 years for all projectscovered under the program.

• Madhya Pradesh Urja Vikas Nigam Limited (MPUVNL) had filed a pe-tition with MPERC to determine feed-in-tariff for decentralized solarpower projects having a capacity of 500 kW to 2 MW to be set upunder Component A of the KUSUM program.

• Madhya Pradesh DISCOM submitted that MNRE had issued guide-

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lines for implementing the KUSUM program on 22 July, 2019, and it was designated as the state implementing agency for the program.

• MPUVNL explained that it had considered the capital cost as Rs.35.06 million, operation and maintenance (O&M) expenses as Rs.700,000/MW with an escalation of 3.84% per annum, capacity utili-zation factor (CUF) of 21%, and depreciation up to the loan period as4.67% while computing the tariff. The useful life of the project wastaken as 25 years.

• MPERC considered a cost-plus tariff approach based on reasonablenorms for determining solar power tariffs. It observed that the inno-vation in technology, higher system efficiency, improved O&M, anddecline in EPC cost have decreased the solar power project capitalcost for decentralized distributed solar PV power project. Accordingly,the capital cost of Rs. 33.5 million /MW, excluding the land cost, wasconsidered to determine the levelized tariff.

• MPERC considered project’s useful life as 25 years, and the debt-eq-uity ratio as 70:30. The CUF was set at 21% and the return on equity at20% per annum for the useful life of the project.

• MPERC considered the rate of depreciation as 4.67% per annum fora loan tenure of 15 years and 2% per annum for the balance period ofproject life after the loan repayment. The O&M expenses were consid-ered at Rs. 700,000 /MW for the first year of the tenure, and the rateof escalation was fixed at 3.84%. MPERC considering all these factorsdetermined the pre-fixed levelized tariff of Rs. 3.07/kWh.

TNERC Directed Solar Developer to Pay Liquidated Damages for Project Delay

• Tamil Nadu Electricity Regulatory Commission (TNERC) in its latestOrder has rejected a Raasi Green Energy plea to extend the commis-sioning date of a 100 MW solar project in the state. It has also allowedthe state distribution company (DISCOM) to encash its performancebank guarantee (PBG) towards damages.

• Tamil Nadu Generation and Distribution Company (TANGED-CO)  had floated a tender in May 2017 for developing 1.5 GW of solarprojects under the reverse bidding process. The DISCOM finalized alist of 16 developers with a combined capacity of 1,500 MW for sup-plying solar power at Rs. 3.47 /kWh on a long-term basis. Raasi GreenEnergy won the bid to develop 100 MW of solar projects quoting thelowest tariff in the auction.

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• The developer has not commissioned the project as yet and had fileda petition before TNERC asking for a 15-month project-specific com-missioning date extension for 100 MW of solar projects in Ramnad,Tamil Nadu.

• Raasi Green Energy asked TNERC to direct TANGEDCO not to encashits performance bank guarantee (PBG) of Rs. 200 million due to thedelay. It attributed the delay to the implementation of the safeguardduty (SGD) by the Ministry of Finance and sought refuge under theforce majeure clause of the power purchase agreement.

• It contended that the implementation of SGD led to a 17% increase inoverall project cost as a result of an increase in solar module prices.The developer noted that if TANGEDCO encashed the PBG, it wouldsubstantially and detrimentally affect the project’s viability further,arguing that the DISCOM would not be affected if a 12-month exten-sion was granted.

• The Commission noted that 13 other bidders who were part of the 1.5GW auction had discharged their obligations under their respectivePPAs and that Raasi Green Energy was not entitled to any specialconcessions. It added that the 13 other bidders did not claim refugeunder the force majeure clause and executed their projects.

• TNERC stated that since the developer had not declared financialclosure on the project within six months as per the PPA’s terms, therewere no grounds to prevent TANGEDCO from enchasing its PBG.

• TNERC stated that since the project is delayed for over 34 months,the developer is liable to pay liquidated damages to the DISCOM tothe tune of Rs. 10,000 /MW per day to the extent of the capacity notcommissioned on top of 100% PBG encashment.

TNERC Rejected Solar Developer’s Plea for Extending Project Commissioning Deadline

• Tamil Nadu Electricity Regulatory Commission (TNERC) with its Or-der dated Feb, 2021 has rejected a plea by VSR Solar Power seekingan extension of 18 months for commissioning a project citing ‘forcemajeure’ events.

• Earlier, TANGEDCO had floated a tender to procure 1,500 MW of solarpower from the developers establishing solar power plants in TamilNadu under the reverse bidding process. After price negotiation, 16developers with a combined capacity of 1500 MW were finalized byTANGEDCO for supplying solar power at the rate of Rs.3.47 /kWh on along term basis.

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• The successful bidders executed PPAs with TANGEDCO within thestipulated time except for SaiJyothi Infrastructure Ventures (54 MW)and Talettutayi Solar Project Two (50 MW). Their letters of award(LOAs) were cancelled, and the available 104 MW was allotted to fourother developers, out of which VSR Solar Power was allotted 50 MW.

• TANGEDCO issued a letter of intent to VSR Solar Power to establisha 50 MW solar project at Krishnagiri district, and supply solar powerat the rate of Rs.3.47/kWh. The company subsequently requested achange of location of the project and entered into a PPA to developthe project at Vilathikulam in the Tuticorin district.

• Afterword’s, the solar developer cited Safeguard Duty’s impositionon imports of solar modules from China, Taiwan, and Malaysia as a‘change in law’ and a ‘force majeure’ event.

• The developer stated that they had been prevented from develop-ing and commissioning the solar power project at Tuticorin districtbecause of a natural disaster that hit Tamil Nadu’s coast in December2018.

• TANGEDCO said that the PPA executed by the developer stood auto-matically terminated on 21 August, 2019, on account of the develop-er’s failure to commission the project by 21 August, 2019. The develop-er had also not furnished an additional performance bank guaranteeto extend the PPA period beyond 21 August, 2019.

• VSR Solar Power had sought an extension of 18 months from 21March, 2019 to 21 September, 2020. It had requested the Commissionto pay Rs. 51 million encashed by TANGEDCO as a bank guarantee.

• After going through all the facts, the Commission noted that when atime limit is prescribed in the PPA for commissioning of the project,the Commission has no power to extend such time limit.

• The regulator added that the levy of safeguard duty does not fallwithin the ‘force majeure’ clause. The issue was not whether levyof safeguard duty would come under ‘change in law’ but whether‘change of law’ would come under ‘force majeure.’

UPERC Allows Part Commissioning of a 20 MW Solar Project

• Uttar Pradesh Electricity Regulatory Commission (UPERC) approvedthe part commissioning (14 MW) of a 20 MW solar project. It said thatseparate wheeling and banking agreements should be signed foreach part of the capacity of 14 MW, 4 MW, and 2 MW.

• AMP Solar Green Power entered into a (PPA) with RCCPL Private Lim-

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ited and Birla Corporation (captive users) for 25 years.

• On 25 October,2019, AMP Solar Green Power applied for a grant oflong-term access (LTA) to transfer 14 MW capacity from the Payagpursubstation to the Bachhrawan substation and 6 MW capacity fromPayagpur substation to Tripula substation. The Uttar Pradesh PowerTransmission Company Limited (UPPTCL) granted LTA to the petition-er’s solar power project. Later, the company entered into a bulk pow-er transmission agreement on February 14, 2020, for transmission ofelectricity under open access with UPPTCL.

• Later the petitioner said that only 13 MW to 14 MW out of the installedcapacity of 20 MW was generated because of harsh winter months.UPERC agreed that the company could not supply electricity to itsconsumers despite having signed the PPAs because of weather con-ditions.

• It said that it took a pragmatic view and allowed part commissioningto promote open access to small solar projects in the state. Further,UPERC added that the developer could declare the commissioning of4 MW and 2 MW for two other open access consumers as and whenit happens.

• In relation to the wheeling and banking agreement, UPERC said thatthe AMP Solar Green Power could approach Uttar Pradesh PowerCorporation Limited (UPPCL) to sign the agreement for 14 MW andsubsequently separate agreements for the capacity of 4 MW and 2MW.

KSERC Allows Net Metering for a 100 kW Solar System at a Housing Society

Kerala State Electricity Regulatory Commission (KSERC) recently has ruled that DISCOM should allow group housing societies to avail supply LT voltage levels to meet the power requirements and install solar PV systems under net metering as prosumers, up to a maximum capacity of 100 kW.

• KSERC said that residential consumers with connected loads up to20 kW are permitted to install solar systems of capacity up to 20 kWunder net metering, irrespective of their connected load.

• The Indian Oil Officers Cooperative Housing Society had filed a pe-tition with the KSERC to clarify that connected load was not a limi-tation for connecting solar projects for group housing societies andresidential flats. They wanted to install a 100-kW solar system.

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• The housing society approached the KSEB for issuing a feasibilityreport for installing a 100-kW solar system. However, the AssistantExecutive Engineer (AEE) or the Palarivattom region refused to pro-vide the report. Because of the KSEB’s non-cooperative attitude, theresidents would not be able to benefit from the solar system they hadinstalled using their funds.

• KSEB, in its reply, said that as per the regulations the limit of 20 kWconnected load would not apply to group housing societies andresidential flats for common services such as lifts, common lighting,clubhouse, car parking, and common areas.

• The state DISCOM said that relaxation was not available to grouphousing societies and residential flats for installing solar systems.Such consumers must limit the solar installation to the connectedload for availing of the net metering facility.

• KSERC stated that for all prosumers irrespective of tariff capacity, re-laxation was not available to the group housing societies and residen-tial flats for installing solar PV for common services, exceeding eithertheir contract demand or connected load as applicable.

• However, as part of promoting rooftop solar installations by resi-dential consumers, the Commission permitted installing renewableenergy systems of capacity up to 20 kW irrespective of the connectedload.

• If the prosumer desires to install the renewable energy system abovethe connected load or contract demand, the augmentation of thedistribution system required for connectivity must be borne by theprosumer.

• KSERC noted that if the consumer’s connected load exceeded 100kW, the consumer must change the supply voltage from LT to HT.

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