Central Electricity Regulatory Commission (CERC) has adopted the transmission charges (tariff) for the interstate transmission system (ISTS) scheme being developed by Solapur Transmission Ltd, a wholly-owned subsidiary of Torrent Power Ltd.
In a recent order, CERC approved and adopted the single annual transmission charges (tariff) of Rs.500 million (Rs.50 crore) as the final offer of the successful bidder, Torrent Power.
The tariff adoption is subject to grant of transmission licence by CERC to Solapur Transmission Ltd, the transmission service provider (bidder) selected under the tariff-based competitive bidding (TBCB) route.
Meanwhile, CERC has granted in-principle approval to the transmission licence to Solapur Transmission Ltd, subject to no objections received to a public notice that the bidder is expected to issue shortly. Objections, if any, needs to be submitted before CERC by June 14, 2024 and the matter will come up for next hearing on June 18, 2024.
Solapur Transmission Ltd will be developing an ISTS scheme officially termed as “Transmission system for evacuation of power from RE projects in Solapur (1,500 MW) SEZ in Maharashtra.” Estimated to cost around Rs.471 crore, the scheme is envisaged for completion by March 2026. [SEZ is Solar Energy Zone]
Torrent Power won this project under the TBCB mechanism, and the project SPV was formally transferred by bid process coordinator PFC Consulting Ltd to Torrent Power on March 20, 2024. (Read more)
Notably, this project marked the entry of Torrent Power in the interstate power transmission development space, under the TBCB route.
No reverse auction
It is interesting to note that no e-reverse auction (e-RA) was conducted during the bidding process for this scheme where Torrent Power was in the race with three other contenders – India Grid Trust (L2), Sterlite Power (L3) and Power Grid Corporation of India Ltd (L4).
Torrent Power, with a quote of Rs.500 million, was declared as the successful bidder based on the initial price bids, with no e-RA held thereafter. This is probably the first instance in recent history where a bidder has been selected without conducting the e-RA process.
One plausible reason why no bidder participated in the e-RA was that Torrent Power’s initial (and winning) bid of Rs.500 million was already very competitive. The L2 bid was Rs.545 million, followed by Rs.600.70 million (L3) and Rs.614.55 million (L4).
For instance, in order to match Torrent Power’s bid, even the L2 bidder would have had to lower its initial bid by as much as 8.25 per cent. For the L3 and L4 bidder, the corresponding metrics would have been much higher at 17 per cent and 19 per cent, respectively.
Also read: CERC Grants Transmission Licence To Pachora, Halvad ISTS Schemes
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