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Rajasthan Urja Vikas and IT Services Limited (RUVITL) recently petitioned the Rajasthan Electricity Regulatory Commission to extend Power Purchase Agreements (PPAs) for several wind power generators. Initially, these PPAs were set for 20 years and had recently reached expiration. RUVITL sought a five-year extension at a revised tariff of ₹2.44 per kWh, the rate identified in previous bidding exercises.
RUVITL manages power procurement for distribution to end consumers through local Discoms. Due to a shortfall in meeting Renewable Purchase Obligations (RPO) and the growing availability of renewable energy, RUVITL aimed to maintain agreements with existing wind power providers. The PPAs with four wind power firms – Lahoti Overseas Ltd., NuPower Renewables Pvt. Ltd., Sun and Sand Hotels Pvt. Ltd., and Prem Cables Pvt. Ltd. – were thus the focus of the petition.
The petitioner emphasized the necessity of these agreements to help meet the state’s RPO targets. Discoms in Rajasthan have encountered challenges in achieving the required percentage of energy sourced from renewables. The extension sought by RUVITL aligned with regulations allowing extended agreements if they support RPO fulfillment. RUVITL proposed that the extended period’s tariff aligns with the SECI’s most recent competitive bidding, set at ₹2.44 per kWh, in its decision to approve further procurement of wind energy.
Each of the four firms involved in this petition had varied responses. Lahoti Overseas Ltd. and NuPower Renewables Pvt. Ltd., owning wind power capacities of 1.25 MW and 4.2 MW, respectively, agreed to the terms proposed in the extension, allowing RUVITL to proceed with updated PPAs for five years at the proposed tariff. However, Sun and Sand Hotels Pvt. Ltd., operating a 6.25 MW plant, indicated that the proposed rate made continued operations economically unviable, citing increased operational costs that hindered maintaining profitability at the reduced tariff. Thus, they opted out of the extension. Similarly, Prem Cables Pvt. Ltd., which used its 0.6 MW plant mostly for self-consumption, declined the renewal and opted to retain its power output entirely for its use.
After reviewing submissions from all parties, the Commission ruled to approve the PPA extensions for Lahoti Overseas Ltd. and NuPower Renewables Pvt. Ltd. These extensions are valid for five years or until the completion of 25 years from each project’s commercial operation date, whichever comes first, at the agreed tariff of ₹2.44 per kWh. The Commission instructed RUVITL and these respondents to formalize the extensions through supplementary agreements.
For Sun and Sand Hotels Pvt. Ltd. and Prem Cables Pvt. Ltd., which opted out of the extension, the Commission acknowledged their decisions and allowed the PPAs to conclude without further continuation. These conclusions allowed RUVITL to balance its power procurement strategy to meet RPO targets, although the Commission also acknowledged the state’s ongoing renewable energy goals and directed Discoms to make continued efforts to source renewable energy through competitive channels to mitigate future RPO shortfalls.
The Commission’s decision thus reflects a careful balance, enabling RUVITL to maintain its renewable energy supply from willing generators while respecting the operational and financial preferences of those opting out. This approach provides flexibility in Rajasthan’s renewable energy procurement strategy and supports its objectives for sustainable energy sourcing.
