CERC Approves 1.7 GW NHPC Solar Tariffs Ranging ₹2.43 to ₹2.47/kWh

Background and Context

In October 2024, NHPC initiated a competitive bidding process for 1,200 MW of interstate transmission system (ISTS)-connected solar power projects. The tender attracted significant interest, with eight bidders participating in the process. The resulting tariffs were highly competitive, ranging from ₹2.43/kWh to ₹2.47/kWh. The initial allocation involved several major players, including Teerth Gopicon, Hanur Solar Power, ReNew Solar Power, and Avaada Energy. Bharat Petroleum Corporation was also initially involved but was subsequently disqualified for failing to meet the minimum capacity threshold of 50 MW, which adjusted the base allocation to 1,170 MW.

Key Details

NHPC exercised a greenshoe option to expand the project capacity, allocating an additional 500 MW to bidders willing to match the lowest discovered tariff of ₹2.43/kWh. Primary beneficiaries of this expansion included Hanur Solar Power and ReNew Solar Power. NHPC defended the use of the greenshoe mechanism before the Central Electricity Regulatory Commission (CERC), arguing that it enhances efficiency and economy in public procurement. Despite the lack of explicit mention of greenshoe options in standard Ministry of Power guidelines, NHPC maintained that the practice is not prohibited and aligns with the flexibility permitted under the request for selection (RfS) documents.

What This Means for EPCs and Developers

For EPC contractors and developers, this approval is a significant milestone. It confirms that regulatory bodies are willing to accept innovative capacity-scaling mechanisms if the bidding process remains transparent and the resulting tariffs are competitive. The discovered tariffs of ₹2.43/kWh to ₹2.47/kWh are notably lower than the ₹2.52/kWh to ₹3.05/kWh range seen in other recent commission-approved tenders, signaling a continued downward pressure on solar power pricing. Developers should note that strict adherence to technical and financial evaluation criteria—such as the minimum capacity threshold—remains critical to avoiding disqualification.

What Happens Next

While the CERC has approved these specific tariffs, the commission noted a lack of formal recognition for the greenshoe mechanism in current guidelines. Future tenders may see more explicit regulatory frameworks regarding how and when such options can be exercised. NHPC, having secured the necessary approvals, will now focus on project execution to meet the timelines associated with these ISTS-connected assets. Stakeholders should monitor upcoming Ministry of Power updates for potential formalization of the greenshoe mechanism in standard bidding documents.