Summary:

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## **1. Objective & Context**– **Nodal Agency:** Solar Energy Corporation of India (SECI)– **Purpose:** Implement a 500 MW pilot CfD mechanism to supply **1500 MWh of renewable power daily during non-solar hours** (e.g., evening peak).– **Financial buffer:** A **₹76 crore CfD Stabilization Fund** provided by the Government of India.– **Goal:** Test a market-based renewable integration model that ensures stable developer revenues while maintaining competitive power exchange pricing.

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## **2. How the CfD Works**– **Strike price** discovered via reverse auction by SECI (with possible ceiling).– **Reference price** = zonal Day-Ahead Market (DAM) price.– **Settlement:**– If market price > strike price → excess goes to CfD pool.– If market price < strike price → CfD pool pays developer the shortfall.– **Profit/loss sharing (daily, reconciled monthly):**– 30% to developer, 70% to CfD pool.

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## **3. Key Implementation Guidelines**| Aspect | Detail ||——–|——–|| **Contract term** | 12 years (build-own-operate). After that, developer free to exit or sign PPAs. || **Capacity limits** | Max 125 MW per bidder (375 MWh). || **Bidding sequence** | GDAM → OCF to DAM → any residual/curtailed volume to RTM. || **Stabilization fund** | ₹76 crore revolving buffer. If pool is negative, SECI replenishes from its own resources (Govt outgo limited to ₹76 crore). || **SECI’s fee** | Up to 25% of net pool profits (after developer’s 30% share). 2-year moratorium on withdrawal; then quarterly max 30% of entitled share based on liquidity. || **REC revenue** | RECs issued for RE sold in brown markets (DAM/RTM) must be sold and proceeds deposited into CfD pool. || **Transparency** | SECI may use power exchange clearing corporation for settlement. Must follow CERC/SEBI rules. || **Post-12 years** | SECI reconciles, audits, and seeks MNRE direction on any surplus funds. |

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