TNERC rejects NLC India Limited’s plea for compensation over renewable curtailment

CHENNAI: The Tamil Nadu Electricity Regulatory Commission (TNERC) has dismissed a petition filed by NLC India Limited (NLCIL) seeking Rs 51.08 crore in compensation for losses incurred due to repeated power curtailment from its renewable energy projects.

The Central Public Sector Enterprise had approached the commission through a dispute resolution petition, alleging that the Tamil Nadu Generation and Distribution Corporation (Tangedco) and the State Load Despatch Centre (SLDC) issued frequent backing down instructions to its solar and wind power plants for reasons other than grid security.

The corporation, which has invested nearly Rs 6,000 crore in renewable energy capacity of about 1,400 MW in Tamil Nadu, claimed that such curtailments between 2018 and June 2022 led to revenue losses of Rs 51.08 crore.

According to figures presented before the commission, NLCIL’s solar projects lost 132.9 million units (MU) of generation during the period, while its wind project was forced to back down 13.7 MU, amounting to a total loss of 146.6 MU of clean energy.

In its defence, Tangedco and Tantransco argued that curtailments were resorted to only in the interest of grid stability, pointing to the large share of intermittent renewable capacity in the State. They contended that renewable power injection was highly variable and that managing grid frequency within the prescribed band was essential to avoid penal action under national grid regulations. The State utilities further emphasised that neither the commission’s tariff orders nor the power purchase agreements (PPAs) contained any provision for deemed generation compensation.

The commission noted that its earlier order of April 2022 had directed enforcement of the “must run” status for renewable energy plants, but did not extend to granting commercial relief. Referring to that ruling, TNERC clarified that the relief was confined to operational compliance and not to claims of financial entitlement.

The central PSE had relied on a 2021 judgment of the Appellate Tribunal for Electricity (APTEL), which held that renewable generators were entitled to compensation if curtailment was imposed for reasons other than grid security. However, TNERC observed that the matter was pending before the Supreme Court and reiterated that it could not override the terms of the existing PPAs.

“Backing down instructions issued on grounds of grid security cannot be construed as unlawful,” the order stated, adding that no relief could be granted in the absence of an enabling contractual or regulatory provision.