In Short : NLC India Limited’s ₹51.08 crore compensation petition was denied by the Tamil Nadu Electricity Regulatory Commission (TNERC). Between 2018 and June 2022, NLC claimed that about 1,400 MW of its renewable energy capacity was unjustly reduced, costing the company 146.6 million units of green power. TNERC, however, decided that curtailment choices were necessary for grid stability and were not covered by existing agreements’ compensation clauses.
Justification for Curtailment and Regulatory Boundaries
NLC claimed that it suffered significant financial losses as a result of TANGEDCO and the State Load Despatch Center’s unreasonable orders to lower the production from its wind and solar projects. Nonetheless, the commission maintained that such measures were implemented to preserve grid dynamics and dependability. TNERC explained that its previous “must-run” regulation only guarantees operational compliance—and does not grant producers financial recourse—because neither the power purchase agreements nor tariff orders allow for reimbursement for reduced generation.
Legal Battle Still Ongoing NLC’s argument was partly supported by a 2021 favorable ruling from the Appellate Tribunal for Electricity (APTEL). While acknowledging this, TNERC pointed out that the matter is still being appealed to the Supreme Court. Therefore, existing contractual or regulatory frameworks cannot be overridden by APTEL’s decision. The commission’s ruling reaffirms that, despite being operationally required, curtailment procedures cannot be financially contested unless specifically permitted by agreements.
Impact of Clean Energy
Tamil Nadu’s action highlights the crucial—but delicate—balance of grid integration, even though the outcome may impact the revenue certainty for producers of renewable energy. Maintaining investor confidence in the development of renewable energy requires both enforceable contracts and transparent curtailment regulations. In order to properly manage changing, grid-scale energy infrastructure, the ruling also emphasizes the necessity of clarity and cooperation between regulatory agencies and clean power producers.
About NLC India Limited
One of the top central public sector companies in India, NLC India Limited, is a significant force in the electricity and renewable energy industries. It has spent almost ₹6,000 crore in these assets and operates more than 1,400 MW of wind and solar plants in Tamil Nadu.
