Month in a Minute: Top Headlines from the Indian Renewable Sector in February 2026

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					</table><p>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) has partly approved the adoption of tariffs discovered through a competitive bidding process for firm and dispatchable renewable energy (FDRE) procured by <a href="https://www.nhpcindia.com/" target="_blank" rel="noopener">NHPC</a>, while curtailing the allocation of additional capacity under the greenshoe option.</p>
<p>The Commission adopted tariffs of ₹4.37 (~$0.048)/kWh to ₹4.38 (~$0.048)/kWh for 1.8 GW out of the 2.1 GW sought by NHPC, comprising 1.2 GW under the base allocation and 600 MW under the greenshoe option instead of the full 900 MW proposed.</p>
<p>It also capped the trading margin at ₹0.02 (~$0.0002)/kWh.</p>
<p>CERC also directed all renewable energy implementing agencies (REIAs), including NHPC, to seek clarification from the Ministry of Power on the greenshoe mechanism to ensure transparency and regulatory certainty in future bids.</p>
<p><strong>Background </strong></p>
<p>NHPC filed a petition seeking the adoption of tariffs determined for the procurement of 2.1 GW of interstate transmission system (ISTS)-connected FDRE.</p>
<p>NHPC issued the Request for Selection (RfS) in March 2024 for an initial 1.2 GW, later incorporating a greenshoe option of up to 1.2 GW.</p>
<p>Following an e-reverse auction <a href="https://www.mercomindia.com/nhpc-fdre-auction-ii" target="_blank" rel="noopener">held</a> in September 2024, five bidders—Essar Renewables, <a href="https://www.serenticaglobal.com/" target="_blank" rel="noopener">Serentica Renewables</a>, <a href="https://www.junipergreenenergy.com/" target="_blank" rel="noopener">Juniper Green Energy</a>, <a href="https://www.hexaclimate.com/" target="_blank" rel="noopener">Hexa Climate Solutions</a>, and <a href="https://www.avaada.com/" target="_blank" rel="noopener">Avaada Energy</a>—were selected.</p>
<p>NHPC argued that the tariffs discovered were aligned with prevailing market rates for similar FDRE projects awarded by other REIAs, such as NTPC, SECI, and SJVN.</p>
<p>It also justified the enhanced allocation under the greenshoe option as consistent with the RfS and standard industry practice, despite the absence of an explicit greenshoe provision in the central bidding guidelines.</p>
<p>NHPC also sought approval for a trading margin of ₹0.07 (~$0.0007)/kWh.</p>
<p><strong>Commission’s Analysis </strong></p>
<p>The Commission held that the base bidding process was transparent and in compliance with Section 63 of the Electricity Act, and that the discovered tariffs were reasonable and within the range of market-discovered FDRE tariffs.</p>
<p>It observed that the allocation of substantially higher capacity to certain bidders under the greenshoe option such as Avaada Energy and Hexa Climate Solutions could raise issues of fairness, equal treatment, and transparency.</p>
<p>Consequently, CERC restricted greenshoe allocations to 470 MW for Avaada Energy, 80 MW for Hexa Climate Solutions, and 50 MW for Juniper Green Energy, aligning them with first-round allocations, and limited total greenshoe capacity to 600 MW.</p>
<p>CERC directed NHPC and other REIAs to approach the Ministry of Power for formal clarification on the greenshoe option, including possible limits on additional capacity allocation.</p>
<p>Regarding trading margin, the Commission ruled that NHPC may charge a margin as per the power sale agreements once executed, but capped it at ₹0.02 (~$0.0002)/kWh if adequate payment security mechanisms are not provided.</p>
<p>In June last year, CERC <a href="https://www.mercomindia.com/central-electricity-regulator-approves-tariffs-for-nhpcs-1-2-gw-fdre-projects" target="_blank" rel="noopener">approved</a> a tariff ranging from ₹4.48 (~$0.051)/kWh to ₹4.56 (~$0.052)/kWh for NHPC’s 1.2 GW firm and dispatchable renewable energy (FDRE) projects. The Commission, however, refused NHPC’s request for a trading margin of ₹ 0.07 (~$0.0007)/kWh.</p>
<p>Subscribe to Mercom’s real-time <a href="https://www.mercomindia.com/product/mercoms-renewable-energy-regulatory-updates" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.</p>


CERC Adopts NHPC’s FDRE Tariffs but Cuts Greenshoe Capacity to 600 MW


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					</table><p>The Uttar Pradesh Electricity Regulatory Commission (<a href="https://www.uperc.org/Default2.aspx" target="_blank" rel="noopener">UPERC</a>) has adopted a tariff determined through competitive bidding for a 375 MW/1,500 MWh standalone Battery Energy Storage System (BESS) to be set up in Uttar Pradesh under the Viability Gap Funding (VGF) program.</p>
<p>The Commission also approved a trading margin of ₹0.07 (~$0.0007)/kWh payable to <a href="https://sjvn.nic.in/" target="_blank" rel="noopener">SJVN</a>, the intermediary procurer and bid implementing agency for the project.</p>
<p>The Commission held that the tariff discovery process was conducted in accordance with the <a href="https://powermin.gov.in/" target="_blank" rel="noopener">Ministry of Power’s</a> guidelines and Section 63 of the Electricity Act, 2003.</p>
<p>It approved the Battery Energy Storage Sale Agreement (BESSA) executed between SJVN and UP Power Corporation (UPPCL) for a 15-year term.</p>
<p>The Commission directed all parties to ensure the timely completion of the project so that UPPCL can effectively use the storage capacity for peak load management.</p>
<p><strong>Background </strong></p>
<p>SJVN filed the petition seeking the adoption of a tariff discovered through a tariff-based competitive bidding (TBCB) process for procuring BESS capacity for UPPCL.</p>
<p>The project involves setting up a standalone BESS facility near the 400 kV / 220 kV Garautha substation in Jhansi, with 100% of the contracted capacity to be supplied to UPPCL on a back-to-back basis.</p>
<p>The bidding process attracted 21 bidders, offering a cumulative capacity of 3,395 MW/13,580 MWh.After technical evaluation, 19 bidders were found technically qualified, following which financial bids and an e-reverse auction were conducted.</p>
<p>Ultimately, Patel Infrastructure and Enerica Infra 3 emerged as successful bidders, each awarded 187.5 MW/750 MWh, with quoted tariffs of ₹359,000 (~$3,923)/MW per month and ₹359,999 (~$3,934)/MW per month, respectively.</p>
<p>A key issue examined by the Commission was the ₹0.07 (~$0.0007)/kWh trading margin agreed between SJVN and UPPCL. UPPCL initially sought clarification on whether the margin should be expressed as 0.5% of the tariff or as ₹0.07 (~$0.0007)/kWh.</p>
<p>SJVN argued that ₹0.07 (~$0.0007)/kWh was consistent with the Ministry of Power’s BESS guidelines and was already being adopted by other government agencies. UPPCL ultimately agreed to the margin, citing tight timelines under the VGF program and the project&#8217;s strategic importance in meeting peak demand.</p>
<p><strong>Commission’s Analysis</strong></p>
<p>The Commission concluded that the bidding process was transparent, competitive, and compliant with the Ministry of Power’s guidelines.</p>
<p>Regarding trading margin, the Commission observed that the BESS guidelines permit a margin of either 0.5% of capacity charges or ₹0.07 (~$0.0007)/kWh, and that the trading margin approved in this case fell squarely within the permissible framework.</p>
<p>It also relied on the Central Electricity Regulatory Commission’s trading licence regulations, which allow mutually agreed trading margins in long-term contracts.</p>
<p>UPERC referred to its earlier order <a href="https://www.mercomindia.com/uperc-approves-procurement-of-1500-mwh-battery-energy-storage" target="_blank" rel="noopener">approving</a> UPPCL’s procurement of the same BESS capacity, noting that the project would support renewable energy integration, reduce transmission congestion, and help manage peak demand within the state.</p>
<p>Based on these findings, the Commission formally adopted the discovered tariff and approved the trading margin.</p>
<p>Earlier, UPERC had <a href="https://www.mercomindia.com/uperc-approves-tariff-of-%E2%82%B93-84-kwh-for-300-mw-wind-solar-project" target="_blank" rel="noopener">approved</a> a tariff of ₹3.84 (~$0.044)/kWh for the procurement of 300 MW wind-solar hybrid power by Noida Power Company. Subscribe to</p>
<p>Mercom’s real-time <a href="https://www.mercomindia.com/product/mercoms-renewable-energy-regulatory-updates">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.</p>


Uttar Pradesh Commission Adopts Tariff for a 1,500 MWh BESS Project

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