The main goal was to construct grid-tied solar power plants that could provide these feeders with all of the electricity they needed each year. For a total of 2,158 solar power projects totaling 5,744.58 MW, JdVVNL started the tendering process. For a total capacity of 2,929.8 MW, serving 152,397 agricultural users, it got 1,111 offers.

To calculate the rates for these solar installations, JdVVNL used the rules provided by the Ministry of New and Renewable Energy (MNRE) and RERC for computing the levelized tariff. This required taking into account the current state of the market and feedback from a range of stakeholders, such as producers, suppliers, and bidders of solar modules, especially during negotiating sessions hosted by JdVVNL and other distribution firms (DISCOMs).

Every solar project's capital cost was estimated taking into account both fixed and variable costs. Depending on the scale of the project, variable costs included things like the total ex-works module cost, the remaining project and civil costs, grid connectivity fees, and other ancillary costs including legal, contingency, and liaison fees. Expenses for the 11 kV and 33 kV connection lines, metering systems, and other fixed expenditures were included, regardless of the project's size but connected to the connectivity voltage level.

In accordance with programme requirements, the MNRE also offered financial support in the form of Central Financial Assistance (CFA), which is computed at 30% of the expected installation cost of solar power installations. Land lease rents were also set with options for recurring increases, depending on government-approved rates.

The levelized tariff computation took into account the costs of establishing and maintaining remote monitoring devices, as required by MNRE requirements for PM-KUSUM Component-C feeder level solarization. These prices included both one-time costs like monthly internet access fees and ongoing costs like replacing the system every eight years.

Commission?s Recommendation

According to JdVVNL, bidders that submitted quotes for numerous projects have received letters of award for a number of those projects. In response, MNRE proposed merging many substations as a single bidding group in order to take advantage of economies of scale through its updated standards. By entering into a single power purchase agreement with DISCOM, solar power developers may provide a single rate offer for all projects under one group. In order to speed up programme implementation and find cheaper rates that are advantageous for both farmers and end users, the Commission requested that DISCOMs investigate this potential and research other states' best practices.

The Commission observed that DISCOM's current petition had included levelized tariff parameters based on rules, elements, presumptions, and references used in competitive bidding. Since the petition is under Section 63 for approval of the tariff found via open, competitive bidding, the Commission declines to investigate these specifics. The significance of incorporating more dispersed power was emphasised by the Commission. The industry can be revolutionised if DISCOMs implement initiatives like PM KUSUM Component-C with sincerity. But when these initiatives multiply, it could be important to do system analyses and take balance and storage precautions..

In order to comply with MNRE guidelines for implementing feeder-level solarization under Component-C of PM KUSUM programme, DISCOMs were instructed to prioritise feeders for maximum CFA benefits, monitor changes in law, conduct system studies as needed, perform rate analysis for future bids, and investigate grouping multiple substations for lower tariffs. A ceiling rate of Rs 3.55 kWh for solar power projects to be built up under Component C of PM-KUSUM was approved by RERC last November.