Printed on August 4, 2025: The Energy Department’s unilateral decision to purchase 630 megawatts of solar electricity has sparked intense criticism due to the economic implications and lack of openness in the procurement process.
The Fundamental Problem
The board of the Rajasthan Energy Department approved the purchase of 630 MW from SECI on May 26 at a price of ₹5.06 per kWh. After two Delhi DISCOMs withdrew, SECI offered the capacity to interested states; only Rajasthan accepted. This led to the contract.
Critics point out that the approved contract looks economically uncompetitive because previous e-auction rates for renewable energy combined with battery storage are much lower—about ₹3.18 per unit.
Important Remarks
The agreement, which combines solar, wind, and storage to guarantee power around-the-clock, is set up as an FDRE (Firm & Dispatchable Renewable Energy) contract. Experts contend that this capacity surpasses Rajasthan’s real peak-hour needs, where less expensive storage would have been adequate.
Samta Power director D.D. Agarwal identifies two primary errors:
- Ignoring the state’s current consumption profile and the sharply falling costs of battery storage.
- Risk of being locked into a 25-year PPA at exorbitant rates, similar to agreements made at significantly higher tariffs in the early days of solar adoption
Government Reaction & Upcoming Actions
- All PPA signings have been put on hold while the procurement process is thoroughly investigated, according to Rajasthan’s Energy Minister Heeralal Nagar.
- Government representatives contend that the procurements comply with policy directives and demand forecasts, and that the move supports the swift growth of clean energy capacities and national decarbonization objectives.
What’s at Risk
- Trust among stakeholders: Allegations of partiality toward specific developers are fueled by transparency issues, which raise concerns that public monies may not be distributed as efficiently as possible.
- Legal scrutiny: According to energy experts, procedural flaws may lead to public interest lawsuits, which might cause the project to be delayed and undermine investor trust.
- Implications for policy: The decision might establish a standard for future assessments and approvals of dispatchable renewable projects, particularly with regard to cost competitiveness and procurement procedures.
Summary Table
- 630 MW of capacity (FDRE format; solar + wind + storage)
- Tariff approved: ₹5.06 per kWh
- Competing Tariff: ₹3.18 per kWh (e-auction for solar + storage)
- Monitoring Procedures The state energy minister is currently conducting an investigation.
- Principal Issues Cost, openness, and length of contract
- Justification from the Government Goals for renewable energy, capacity planning, and policy alignment
