New Delhi: An auction for the Pugal solar park in Rajasthan’s Bikaner district discovered a tariff of Rs 3.42 a unit on Wednesday, Rajasthan Renewable Energy Corporation Ltd (RRECL) Chairman and Managing Director (CMD) Dr Rohit Gupta said. “I am happy to share that a tariff of Rs 3.42 has been discovered for Pugal solar park,” Gupta said at the Central Electricity Authority’s (CEA) Brainstorming Conclave on “Making Indian Power Sector AI Enabled” in New Delhi. He described the park as “India’s largest integrated solar power and battery energy storage initiative” and called the rate “a historic low.”
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The Rajasthan Solar Park Development Company Ltd (RSDCL), a subsidiary of RRECL, invited bids for the project in January. The tender sought 2,450 MW of solar capacity connected to the state transmission network, paired with 1,600 MW/6,400 MWh of battery energy storage systems (BESS). That works out to four hours of storage. The batteries are to be charged primarily from the park’s solar plants and are meant to supply power during evening peak demand. The Rajasthan Electricity Regulatory Commission (RERC) approved the procurement earlier this year.
Developers will sign 25-year power purchase agreements (PPAs) with Rajasthan Urja Vikas and IT Services Ltd (RUVITL). RUVITL will act on behalf of the state’s three distribution companies: Jaipur, Ajmer and Jodhpur Vidyut Vitran Nigam.
Rajasthan is also drafting regulations for ancillary services. Asked when the state would release a draft, Gupta said “very soon.” “So we are also framing the ancillary services regulation, by the way,” he had told an earlier panel session at the conclave.
Ancillary services are the reserves a grid operator calls on to keep the system stable when supply and demand drift apart. Under the Central Electricity Regulatory Commission (CERC) (Ancillary Services) Regulations, 2022, these are grouped into primary, secondary and tertiary reserves. Each is deployed over a progressively longer timeframe. States need their own regulations to run such a market within their boundaries. “We do not have the regulation for ancillary services in many of the states,” Gupta said. Karnataka is among the states that have notified rules: its regulator issued the Karnataka Electricity Regulatory Commission (Ancillary Services) Regulations in July 2025. Madhya Pradesh notified its regulations in 2024.
The state has run into three challenges while drafting its rules, Gupta said. The first concerns older contracts. “As we are drafting the regulation and we are doing the stakeholder discussion, one challenge which we are facing is the legacy PPAs, how do we sort of work around them so that they can participate in this market, and what should be the right market signals which can be given to the RE developers,” he said.
The second is the way power exchanges currently operate. “So more flexibility probably would be required even on that side as the states go for developing their ancillary services framework,” Gupta said. The third is capacity building, which he said is needed “not just on the government side but also on the regulator side, because at the end of the day everything has to be approved by the regulator.”
India’s challenge is no longer adding renewable energy (RE) capacity but integrating it into the grid, Gupta told the panel. That includes distributed RE as well as utility-scale solar. “Just last year, of the overall solar addition which happened into the country, almost 36 percent was in the distributed renewable energy projects, which are a whole challenge in itself,” he said.
That growth has created a paradox, according to Gupta. Surplus RE is curtailed in some hours of the day, which he said is eroding developers’ internal rates of return. At the same time, some states have had to buy power from the exchange at “exorbitant prices,” he said, while others that do not buy have resorted to load shedding. “So I think this is a gap which AI can help us fill by making the grid management much more smooth,” he said.
Artificial intelligence (AI) has clear uses in grid management, Gupta said. He listed demand forecasting, load management on the distributed side, optimisation of project performance and predictive maintenance. These solutions are not being implemented for two reasons, he said: policy and capacity.
On policy, Gupta said AI developers are not yet getting the right market signals. The absence of ancillary services regulations in many states is one example. Another is that distributed RE projects fall outside the Deviation Settlement Mechanism (DSM), which penalises generators for departing from their schedules. “So what happens with all of these issues is that the cutting-edge solution developers, they do not see business opportunities,” he said. He called the tightening of DSM regulation “a welcome step” that gives AI developers room to market better forecasting tools. States now need to adopt it, he said.
On capacity, Gupta pointed to a review of Rajasthan’s state load dispatch centre (SLDC) held on Tuesday. The review found that the renewable energy management centres need substantial upgrading, he said. Data is not reaching those centres, and RE developers are not following the load dispatch centre’s instructions, he added. “So that is where a lot of capacity building is required,” he said.
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Rajasthan’s distribution companies are developing a digital twin, Gupta said. The state has also recently launched a monitoring tool for distributed RE projects that is integrating every such project coming up in the state. He said it is not yet a full management system, “but getting there.” The aim, he said, is to combine that data with weather data to give load dispatch centres visibility of generation on the distribution side, “not just on the utility scale side.”
