Mumbai: A unit of JSW Energy has moved the Appellate Tribunal for Electricity (Aptel) against a recent order by the Central Electricity Regulatory Commission (CERC) in a case that balances the sanctity of contracts with costs to the public exchequer.
JSW Renew Energy Five Ltd has challenged the CERC's recent decision to not adopt tariffs for the company's upcoming battery energy storage system (BESS) pilot project citing higher prices than the market. CERC refused to adopt the tariff of ₹10,83,500 per megawatt a month for a 500-megawatt BESS pilot project. The tariff was discovered through a reverse auction in August 2022.
The regulator argued that the tariff was higher than what was discovered through subsequent auctions in 2023 and 2024, where rates went to as low as ₹3,81,000 per megawatt a month.
"We are of the view that this decline reflects the decreasing cost of batteries due to a reduction in material cost and the growing competitiveness of BESS projects," CERC said in its order dated 2 January, a copy of which Mint has reviewed.
In its appeal, a copy of which Mint has also seen, JSW Energy argues that CERC's decision undermines the sanctity of the bidding process.
"To test the reasonability/alignment with the market rate, only the rate prevailing at the time of the submission of the bid could have been taken into consideration; and not the prices which may have been discovered two years down the line, during pendency of the tariff adoption proceedings," the company said in its appeal.
The company said that the Solar Energy Corporation of India (Seci), which handled the award of the pilot project, was responsible for certain delays which resulted in the tariff not being adopted by CERC earlier. Now, JSW Energy argues, it is being penalized for delays that it was not responsible for.
In its order, CERC had taken note that the delays were not a fault of JSW Energy. However, it opined that regardless of the reason for delays, adopting the original rates "will lead to unintended gains for the developer and a wrongful loss to the public at large."
JSW Energy has prayed Aptel for a reversal of CERC’s decision and adoption of the tariff discovered in the August 2022.
An email seeking comment from JSW Energy as well as CERC remained unanswered till press time.
In India, CERC acts as the regulator for the power sector and handles roles such as tariff regulation, promoting competition, ensuring quality of power supply and formulating policy. JSW Renew Energy Five is a unit of listed JSW Energy, which is part of the JSW Group that also includes JSW Steel, JSW Paints and JSW Cement.
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