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In a recent development, BSES Yamuna Power Ltd. (BYPL) has filed a petition seeking approval for the Power Sale Agreement (PSA) dated 16th January 2019. The agreement, executed with the Solar Energy Corporation Ltd. (SECI), involves the procurement of 100 MW of Wind Power. BYPL emphasized compliance with the DERC (Renewable Purchase Obligations and Renewable Energy Certificate Framework Implementation) Regulations, 2012, and the DERC Business Plan Regulations, 2017, which mandate the procurement of renewable energy.
The petition outlines the process starting with BYPL expressing interest in purchasing wind power from SECI in August 2018. The competitive bidding process, aligned with the Ministry of Power (MoP) guidelines, led to the signing of the PSA on 16th January 2019. The agreed-upon tariff for the wind power is ₹2.77/kWh, excluding a trading margin of ₹0.07/kWh, making it a competitive rate in the renewable energy sector.
SECI, in response to the petition, highlighted the specifics of the PSA and the subsequent supplementary agreements. The power is sourced from the wind power project of Sitac Kabini Renewables Private Limited, and the Central Electricity Regulatory Commission (CERC) has approved the tariff. SECI emphasized that the power flow to BYPL has commenced and is ongoing.
Crucially, the CERC, in a decision dated 06.12.2019, adopted individual tariffs for each generator, prompting BYPL and SECI to enter into a supplementary agreement on 10.09.2021. This agreement incorporated the CERC-adopted tariff for Sitac Kabini Renewables Private Limited.
The regulatory landscape surrounding trading margins has evolved, with the Central Electricity Regulatory Commission (CERC) initially notifying the Trading Margin Regulations in 2010. Subsequently, in 2020, the Trading License Regulations replaced the earlier regulations, with mutual agreement on a trading margin of ₹0.07/kWh between BYPL and SECI
A significant legal development occurred with the Hon’ble Appellate Tribunal for Electricity’s judgment on 02.07.2021 in Appeal No. 52 of 2021. The judgment set aside a previous order of the Commission that had reduced the trading margin. This decision influenced the approval of the PSA, with a total tariff of ₹2.84/kWh, comprising ₹2.77/kWh for power and ₹0.07/kWh as trading margin, as per the appellate tribunal’s judgment.
However, the approval comes with a caveat, as the trading margin of ₹0.07/kWh remains subject to the final outcome in the Civil Appeal No. 6310 of 2021, following a directive from the Hon’ble Supreme Court of India on 04.05.2023.
The saga has seen multiple hearings and legal proceedings, including SECI filing appeals and the Commission’s order on 31.12.2020 in Petition No. 65 of 2019. The matter reached the Hon’ble Supreme Court of India, leading to directions and subsequent hearings in June, July, and October 2023. The Commission ultimately admitted the petition, directed affidavits, and reserved the order.
In conclusion, the approval of BYPL’s wind power procurement under the PSA signifies a significant step in meeting renewable purchase obligations. The competitive tariff and adherence to regulatory frameworks, coupled with legal developments, showcase the complexities involved in securing and approving power agreements in the renewable energy sector. The outcome of the legal proceedings will further shape the future of this wind power procurement arrangement.
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