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Himachal Pradesh has secured 900MW of green energy by swiftly approving the purchase of wind-solar hybrid power from the Solar Energy Corporation of India (SECI), a deal rejected earlier by the Punjab State Electricity Regulatory Commission (PSERC).
While the Punjab State Power Corporation Limited (PSPCL) was planning to appeal against the PSERC decision, the Himachal Pradesh government didn’t give it a chance by promptly agreeing to the SECI rate and signing the power purchase agreement. Earlier, this PPA was with the PSPCL, but the PSERC didn’t approve it.
The Himachal Pradesh Electricity Regulatory Commission (HPERC) approved the power procurement on December 17, 2024, allowing the state to tap into affordable renewable energy and positioning it as a leader in sustainable energy adoption.
Missed opportunity
In stark contrast, Punjab’s rejection of the deal has left it grappling with a missed opportunity to secure cost-effective renewable energy. The PSERC had rejected the agreement on November 4, 2024, raising concerns about additional financial liabilities of ₹1,590 crore, including trading margins and transmission losses. The deal was struck over 7 paise per unit as transmission charges, which the regulator found unjustified.
The commission also criticised the lack of firm capacity assurances and PSPCL’s dependence on intermediaries like SECI, suggesting that direct procurement from developers could save ₹2,018 crore over the project’s lifetime.
The same session saw the rejection of another proposal for 1,450 MW solar power from SJVN due to an estimated additional financial burden of ₹1,060 crore.
HP’s decisive move
Himachal Pradesh, however, moved decisively to approve the deal, recognising the critical need to secure long-term renewable energy resources to meet the rising demand.
The approved tariffs, ₹3.15/kWh for 300 MW and ₹3.21/kWh for 600 MW, with a trading margin of ₹0.07/kWh, were discovered through a transparent bidding process by SECI. While PSERC rejected it, the HPERC deemed both competitive and in line with national renewable energy policies. The power will be sourced from NTPC Renewable Energy Ltd., Juniper Green Energy, and Green Infra Wind Energy, ensuring a stable and affordable energy supply for Himachal.
The HPERC also highlighted the transparent nature of the bidding process and the project’s alignment with India’s renewable energy roadmap as key factors in its approval.
Punjab falters
Admitting it as a failure of Punjab, a PSPCL official said that even top power department officials spoke to the Centre about the SECI charges of 7 paise per unit, but the Union government found that Punjab’s contention has no merit. “Now, we have ended up with a loss of 900 MW, which was earlier with PSCPL and now it has been grabbed by Himachal,” the official said.
The inability to secure renewable power through SECI leaves the state struggling to meet its renewable purchase obligations (RPO), mandated by the Centre at 43%. With high land costs hindering local solar projects and twice-failed tenders, Punjab’s renewable energy plans have faltered. PSPCL’s hopes of using hybrid power to reduce peak-hour energy costs and meet future demand remain unfulfilled.
