Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Acme Solar Holdings Ltd (NSE: ACMESOLAR) Q4 2026 Earnings Call dated May. 08, 2026
Corporate Participants:
Nikhil Dhingra — Chief executive officer
Arun Chopra — Chief Financial Officer
Manoj Kumar Upadhyay — Chairman and Managing Director
Analysts:
Nikunj — Analyst
Puneet — Analyst
Karthik Sharma — Analyst
Achal Jalan — Analyst
Aniket Mittal — Analyst
Dhruv Muchhal — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Acme Solar Holdings Limited Q4N FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Nikun said from MUFG. Thank you. And over to you Nikunj.
Nikunj — Analyst
Thank you Neera. Good morning everyone. Welcome to Q4 and FY26 earnings conference call of Acme Solar Holdings Ltd. From the management, we have with us Mr. Manoj Kumar Upadhya, Chairman and Managing Director, Mr. Nikhil Dhingra, CEO, Mr. Arun Chopra, CFO and Mr. Ankit Verma, Head of Corporate Finance. Now I would like to hand over the call to the management for their opening remarks. Thank you. And over to you sir.
Nikhil Dhingra — Chief executive officer
Thank you Nikunj. Good morning everyone. Thank you all for joining us today. I’m Nikhil Ningra, CEO of the company. I would like to begin by expressing my sincere gratitude to Rajat Kumar Singh for his valuable contributions to the company during his tenure as the cfo. He has decided to pursue career opportunities outside of Acme. I wish him all the best in his future endeavors. Arun Chopra has now been appointed as the company CFO and I would like to invite him to take over and walk us through the highlights of Q4 and FY26 for us.
Arun.
Arun Chopra — Chief Financial Officer
Thanks Nikhil. It’s my pleasure to share the highlights of our Q4 and FY26 performance. I would like to start with sector highlights. India has observed its all time highest peak electricity demand of 256Gw on 25th April 26th. This milestone surpasses the previous all time high of 250Gw recorded on 30th May 24th and exceeds the peak of 245Gw observed on 9th January 26th. The rise in demand is in line with the progression of summer conditions across the country with electricity consumption witnessing a significant growth of 8.9% during the month of April 26.
India continues to maintain strong momentum in capacity additions with approx. 55 gigawatt of RE added in financial year 26 taking cumulative renewable energy capacity to 283 gigawatts. Total power generation during FY26 reached 1845 billion units with share of non fossil fuels in total generation reaching 29%, roughly 538.97 billion units. In a significant milestone, India achieved 50% of its cumulative electric power installed capacity from non fossil fuel sources in June 25, five years ahead of the 2030 target set under its nationality determined contribution to the Paris Agreement.
In terms of the regulatory updates, SECCHI has been notified as single REIA by mnre, which is expected to drive a more streamlined, focused and structured bidding framework going forward. In terms of base installation, the sector has witnessed strong regulatory tailwinds. MNRE has clarified that BEST charge from conventional path under FDRE bids can sell power in merchant mode without buyer NOC till the time corresponding RE is not commissioned, speeding up BEST deployment Also, CTU has started processing BEST connectivity requests under Rofer, speeding up commissioning with 36 months of grid charging allowed from the GNA effective date.
CERC has issued a draft SUOMOTO order to extend SCOD timelines under the Connectivity and GNA regulations by up to one year with compensation giving regulatory certainty to delayed projects nearing connectivity deadlines. Thus, transmission delay in brownfield projects provides an opportunity to utilize less merchant operations. Now coming to our company’s performance in line with our continuous focus on early BEST deployment, we successfully commissioned approximately 2.3 gigawatt base capacity.
To date these BEST vestees are running on merchant and short term contracts, capturing the tariff arbitrage between sale and purchase of power during peak and non peak hours respectively. As of date it is delivering net realization value of approximately 2.2 crores per day. Also from an operational standpoint, the BEST is currently delivering a round trip efficiency of approximately 80 to 90% in line or maybe better than our expectations. In addition to BEST, our operational generation contracted capacity now stands at 2990 megawatt.
With respect to our under construction capacity, on our on order book front we won 3001 megawatt peak power FDRE projects basically during the quarter expanding our under construction portfolio to 5.1 gigawatts and total portfolio to 8,071 megawatts which will also require installation of around 17 gigawatt hours. Out of the total under construction capacity, the PPA signed capacity stands at 3,480 megawatts. In terms of capital deployment we have committed total capex of INR 12475 crores which includes capex incurred of INR 6445 crores during the year and purchase orders aggregating to INR 6030 crores.
Continuing to our financial performance, our total Revenue for the quarter stands at INR705 crores and INR2507 crores for FY26, a 31% and 59% increase year on year respectively driven by capacity addition and higher CUs. Total revenue for the quarter includes other income of INR 157 crores. This primarily comprises recurring interest income from cash generated from PAR sales at SPV until it is upstream to shn. It also includes recurring interest on DASA balances maintained in line with debt covenants.
Since the DSRA is largely funded from debt proceeds, the corresponding finance cost is accounted for accordingly in the finance cost EBITDA margin of over 90% both for the quarter and full year on account of favorably operating leverage and optimized operational efficiency. PAT stood at INR 138 crore for the quarter and INR 498 crore for the year with a margin of 19.6% and 19.9% respectively. Now at last coming to operational metrics. For the quarter we generated 1720 million units in Q4 up 13% and 6464 million units in FY26 up 61%.
Year on year our CUs stood at 26.9% in Q4. Further, our grid availability and plant availability stand at over 99% for the year. Coming to our debt optimization efforts, during the year we secured financing of around 15,000 crores for various under construction projects and refinanced debt amounting to another 3,300 crores for various operational projects resulting in reduction of rate of interest of the refinance projects by approximately 150 basis points. Also, the weighted average cost of debt for the operational project stands at 8.4% per annum.
As of date, 2.2 gigawatt of operational projects have an assigned credit rating of AA minus stable. Going forward our key focus remains on timely execution alongside healthy order book additions with the following priorities. We will continue to focus on advancing commissioning and operation of large scale best capacity which will utilize transmission infra of existing operational projects and will run on merchant on short term basis. Upcoming future operational capacity is expected to have an operating battery portfolio of around 10 gigawatt hours along with 1.5 gigawatts of contracted generation capacities subject to timely availability of transmission connectivity and other external factors in terms of order book additions.
While we remain focused on long term 25 year contracts, we also intend to actively participate in short and medium term best opportunities to capitalize on evolving market demand and merchant market dynamics. With that, I now open the floor for questions. Our team would be happy to take them. Thank you.
Questions and Answers:
Operator
Thank you very much. We now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touchdown telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles participants. You may press star N1 to ask a question. The first question comes from the line of Puneet from hsbc, please go ahead.
Puneet
Yeah, thank you so much for the opportunity and congratulations on good performance. My first question is on your battery side. Can you talk about how much of the battery cost you capitalized in the previous year and how much have you spent so far in the in the 2.3 gigawatt that is now fully commissioned?
Nikhil Dhingra
Hi Puneet, thanks for the query. So in terms of last quarter this quarter we have done approximately around 1200 crores of capex on the battery. I think for the this quarter it is still going on. So we will update you once this quarter finishes. But in the last quarter we did around in this quarter so far,
Arun Chopra
Current quarter
Nikhil Dhingra
Basically last quarter was around thousand thousand to twelve hundred crores.
Arun Chopra
And how much was commissioned till
Puneet
Last quarter? Yeah, just in capacity terms as well.
Nikhil Dhingra
1.3.
Puneet
Okay. Second is if you can also give a sense of what is the run rate EBITDA you are making out of your existing capacity with and without best so far.
Nikhil Dhingra
So 87, 87% is our beta for this year. Right. It is in the range of 88, 89% I think 91%.
Puneet
From the 299 capacity.
Nikhil Dhingra
If you look at FY26 so majorly you know whatever this 3 gigawatt is operational so that was primarily running in 26. So give or take for the last full year our EBITDA including other income has been around 2,200 odd crore. This primarily includes revenue from sale of power only from the PPA project. However, given that the batteries came in various phases in the last quarter, especially in March, probably the run rate EBITDA you will realize in this quarter itself. But having said that, like I mentioned, 2.3 GWh is currently operational and of course it is running on merchant basis and as Arun highlighted earlier, so it is delivering give or take
Operator
Average net realization of 2.2 crore per day which is effectively more than 60 crore per month. This capacity which is running. And
Nikhil Dhingra
Last quarter there was almost nothing from the battery. Yeah, this quarter we have in March quarter then almost negligible amount because it just was getting started. It was not even started at various places. Yeah.
Puneet
So 2.2 crore per day on a 2300 megawatt hour battery. Right?
Nikhil Dhingra
Yeah.
Puneet
And lastly if you can also talk about how have your new solar plants been operating in terms of PLF. So what was commissioned in FY25? What sort of PLF did they end up generating for 26.
Nikhil Dhingra
So our seeker plant basically got commissioned in this year. Right. And it is doing close to around 29 to 30% here for the overall year.
Operator
So majority of the projects puneet are in Rajasthan and roughly that capacity is roughly 2200. 2200 megawatt. So for the last quarter I think
Nikhil Dhingra
The CPLF has been around 28% plus for these plants
Puneet
On a full year basis. 29 to 30.
Nikhil Dhingra
Sorry,
Puneet
For full year basis you said 29 to 30% from the new plants.
Nikhil Dhingra
For the new plant it is because we have a higher DC installed there. So it has a higher CUF
Puneet
For
Nikhil Dhingra
The foliate. It’s been close to 26% for the entire portfolio. He’s asking about Rajasthan.
Puneet
Yeah. Okay. And. And lastly there was this Seki ISTs Hybrid Transix Scheme which got a regulatory approval for 3.25. And. And now it says that there is a battery inclusion. Can you talk about how has the economics changed there?
Nikhil Dhingra
You’re talking about the not yet signed, right?
Puneet
Yeah, but it. It got approved, right? I mean that.
Nikhil Dhingra
Yeah, yeah, it got approved. Right. So basically it is. What happens is most of the states want battery installation along with the project. So it basically keeps the return in. In high teens only. So it does not impact really the returns from this thing. But of course we need to. We need to satisfy the customer requirement in terms of the power mix they want. Because everybody needs peak power now. So that is where we need to offer that one hour of battery. Yeah.
Puneet
Okay, understood. That’s up to my. Sir, thank you so much and all the best. Thank
Nikhil Dhingra
You.
Operator
Thank you. Next question is from the line of Karthik Sharma from Anandra. Please go ahead.
Karthik Sharma
Congrats on a great set of numbers. I hope I’m audible.
Nikhil Dhingra
Yes, please. Yes
Karthik Sharma
Sir. Given the just continuing from the previous participants. Given the rising concentration of projects in Rajasthan and ongoing transmission and grid constraints in the strait, is there any curtailment impact that we’ve had? Or. And if yes, could you quantify in like what happened in Q4 or the full year in EBITDA loss or. And how are you thinking about future Project allocations like Gujarat or Maharashtra if there is any.
Nikhil Dhingra
Right, right, right, right. Well that’s a very relevant point. The key thing is in terms of the curtailment which where are you connected in terms of the transmission system? So we have you can say around two projects only out of our whole portfolio which are in Rajasthan connected to the state grid. Rest of our portfolio by and large is on the central grid where you are compensated for the curtailment through the regulatory mechanism. So in the whole year we were of course and in curtailment also there are two kind of curtailments where you don’t get a long term open access like which happened with our seeker plant before the full commissioning because the long term open access was not active.
So that is like pre COD or a pre DNA kind of a curtailment which is not usually grid related curtailment. That is where the infrastructure is not yet ready but you are ready with the plant. So I would not call that a curtailment. But adjusted for that for the whole year we have only 5 to 6 crores of impact on the curtailment which is the real curtailment. And of course on stu it was only 3 crores in Rajasthan for the whole year. So state connected projects and the 2,3 crore was on the account of maintenance done by the grid operator.
On account of the. On account of you can say the O and M which they do for. For that. So that was the impact on curtailment on our project during the year
Karthik Sharma
And the future project allocation if you could give any.
Nikhil Dhingra
So all of our projects are in the ctu. So we have consciously built a portfolio with you can say all the. The central counterparties on ctu. So we don’t have. And also that is another reason we have not gone aggressive on the CNI because they are all state projects we have to do. If you want to do some of the actual consumer. So in terms of the. All our CPU connected projects with CPU connected substations where you are regulatory protected from the customer payments are there irrespective of. You can say the grid curtailment.
So they are all on. On the. You can say various substations in Rajasthan, Gujarat, Madhya Pradesh, Andhra Pradesh, Karnataka. So once. Once the long term open access is granted then you are protected from curtailment on a CTU connected substation.
Karthik Sharma
Understood sir. So just. Can I add my second.
Manoj Kumar Upadhyay
Just. No, just a minute. I would like to clarify. My name is Manoj. Most of the CTU connected project we are installing the battery. So in fact such curtailment sometimes provides you opportunity to sell the power in the peak or in the evening.
Achal Jalan
And so
Manoj Kumar Upadhyay
All RC2 connected plants, that’s what we are focusing. All our CTU connected plant will have a battery available. So whenever that curtain will happen we will charge the battery and we will use that power. Right. While we will get compensated for the curtailment. But we will use it free power also to charge the battery.
Karthik Sharma
Got it? Got it sir. Thank you.
Nikhil Dhingra
Just on that, just to finish that point, as the battery installation happened, the curtailment issue will be further reduced because as more and more battery gets installed in Rajasthan and it is by and large happening in Rajasthan because they have the largest operational solar. So. So you will see that the transmission system improves a lot with the battery installation.
Karthik Sharma
Understood? Understood sir. So we highlighted that there was a sharp improvement in receivables and the DSO has come down to 14 days which was at one point in time 180 days. So despite the significant scale up, could you help us understand whether this is largely driven by like one time collections or is this like a structural shift that you are seeing in the portfolio mix when you say that it’s going to be more central off takers and how sustainable this working capital profile is going forward.
Nikhil Dhingra
So see our portfolio as it gets more operational it is shifting towards 100% central. All of our under construction projects are 100% central where they take a cash discount. So it essentially. And they pay in 10 days, basically in 30 days if you pay you get a cash discount. So. So that is where they take a cash discount. So that is why we are getting a 15 days kind of a receivable cycle today. So which is more or less not because of one off. It is. It is the norm.
Operator
Yeah.
Nikhil Dhingra
So Ankit, you want to add
Operator
Earlier I think the high receivable days you are talking about. So that pertains to very. You know you can say FY23 and before that. And I
Nikhil Dhingra
Think that point of time like Nikhil mentioned the contribution of central octagon was less. And there of course some payment issues especially from couple of discoms as well especially Telangana and Andhra. Even that payment has normalized now. Right. Even from the. Is that the effect
Karthik Sharma
That we’ve seen in the trade receivables which have gone down 13% year on year.
Manoj Kumar Upadhyay
Yeah, yeah. Actually that you know that there was a regulatory reform which was government has implemented called LPS right. Under that LPS late payments are charged scheme 2, 3 states which were delayed actually because of the various regulatory issues. There Were just some court cases in Andhra Pradesh. All those dues are now settled and they are paying on time because this LPS scheme is very restrictive. They don’t pay on time. You inform to property portal and they will get disconnected from the power.
So this discipline is helping especially for the state project. But mostly now we what has happened Our our projects are central projects. So central projects technically they are paid in just 67 days because they want to take a cash discount.
Karthik Sharma
Thank you so much.
Operator
Thank you. Next question is from line of Aniket Mittal from SBI Mutual fund. Please go ahead.
Aniket Mittal
Thank you. First question was just on the cash flow. So when I look at the cash flow statement they’re seeing a very large increase in the non current assets some other balance sheet items which is impacting the cash flow from operations. Just wanted to understand that.
Nikhil Dhingra
So they are. Aniket, could you point out which are the which number you’re referring to and what is the number?
Aniket Mittal
So if I look at the non current assets in the balance sheet. So I was looking at the cash flow statement. Cash flows from operations have come in lower on a yoy basis partly I think because the base for last year was higher. But when I look at the balance sheet there’s been a sharp jump in the other non current assets and also on the other financial non current assets. So just trying to understand what is meaning
Arun Chopra
Because of the capex buying which is happening. So these are mainly. Mainly in good the capital creditors actually.
Aniket Mittal
Okay. And what is the capital advances number then?
Arun Chopra
Capital advances. Roughly 323 crores.
Aniket Mittal
And this, this is pertaining to what.
Arun Chopra
So this advances basically given to. For the procurement of material which has been given to various and that the material will come in over a period of time. These advances have been given to them maybe a partial advance let’s say a 10%, 20% let’s
Nikhil Dhingra
Say battery contracts we have typically 10% advance upfront where we get a bank guarantee against it. Similarly the turbines also we give 20% advance. So these are capital advances you need to give to supplier where they give a. Give you a BG against that.
Aniket Mittal
This is largely because of battery and probably some wind.
Nikhil Dhingra
Yeah. On services and domestic procurement typically we don’t give any advance. But from a international procurement perspective and large equipment we have to because it helps you to bind the supplier also in terms of the contract honoring and. And also giving him advance to purchase raw material. Because if you don’t pay advance he will not have money to purchase the raw material.
Aniket Mittal
Okay. And when I look at The PLF number on a Y Y basis I see a 1% decline. What’s the reason for that? For this quarter.
Nikhil Dhingra
For this quarter, Aniket could be a function of of course the lower radiation or end curtailment. These. These two could be the only two factors which would have impacted on a yoy basis. Of course, the larger capacity. It is a larger capacity. So of course the denominator is higher. But these are the two only factors because it is determined by seasonality as well. So these are the factors in terms of. We can give you a side by side, I think analysis but broadly it is. It is because of these factors.
Aniket Mittal
In the presentation, within the under construction portfolio I also see a merchant base of 654 megawatt hour. Are we putting some birth purely on a merchant basis? What does this pertain to?
Nikhil Dhingra
Actually it is. It is merchant as of now it is. It is slated to go to a PPA which we are supposed to sign very shortly. Most likely because it is pure battery which is taking power from the grid and giving to the grid. It can be fitted in any of these peak power projects. PPA we have, which we have not yet signed with a tariff of either 6.28 or similar. And there are a lot of bids coming in where we can deploy this best. It gives us some flexibility and we also wanted to get it financed on a merchant basis because it gives us some flexibility in terms of getting ready for early installation because it does not tie you to a specific ppa.
So in terms of the financing and in terms of the early commissioning, we have installed it like this. But of course it will go to a PPA.
Aniket Mittal
Okay. And on for FY27, how are we placed in terms of the commissioning of the SGB and FDRE project and the NTPC hybrid project?
Nikhil Dhingra
Right. So there are on the whole commissioning during the year. I would like to explain. There are nima. There is a NIMA substation which will be the first commissioning from our side because that’s the substation which is more or less ready and it is. Will be charged in June because you know the commissionings are determined by the FDRE commissioning. Since you are asking, they are determined by the solar connectivity being ready. So that’s. That’s where the. That is on the. That will commission our two plants.
One is the NHPC and another is the target. So that is the first commissioning from our side on the fdre. Then of course there’s a substation at Fatehgarh which will have the SGV and hold 570 that has a short term open access available right now. The long term open access as per CTU is in March 27 so the full FDRE for SGVN but will be ready by FY27N. So that’s the FDRE and the NTPC we are ready with the solar so but of course there is a long term open access there also which is slated to be commissioned by December 26th.
So and our Pachora wind component is also ready but that is also slated for you can say a couple of quarters later. So by March 27th all this will be commissioned. In terms of the other commissionings we are targeting, there is Pavagada Anantpur which is also going to come up during this year as per the CTU timeline. What we are trying to do is commission the batteries at our operational substations in fatiguead 1 which we have a thousand megawatt then fatigue 2 which is again the fatigue one, sorry 1200 megawatt.
Fatehgarh 2 is thousand megawatt where we have a stoa. In stoa you can transmit all the battery so these and then we have Bekarnate 3 again where Bay is ready so you can transmit the battery power and and of course so these you can say around aggregating to around 2500 megawatts of of ready connectivity for selling battery power during night is what is already with us from where we are trying to transmit 10 gigawatt hours of battery during the next of the calendar year. So in terms of commissionings, so the battery commissionings are going to happen early because we have ordered battery, the battery is arriving every month and also in parallel as and when the CTU substations are getting charged we will commission the solar.
Also in terms of the preparedness, the transmission line, the balance of system, the equipment delivery, they are all on track and we are trying to co terminate with the CTU timelines of these substitutions and we want to also want to prepone our revenue from the battery sales because from the power sales through nighttime power which is now allowed as per the PPA construct and as per the clarification given by mnre. So we will see a good jump on the revenue side because of the nighttime installations which will more than compensate for you can say the CTU timelines getting shifted from one quarter to another.
So that is the reason we have preponed the battery installation and we are commissioning it at the operational substations and not in the greenfield substations. That is the key thing. And we have 2,500 megawatts of ready substations and connectivity which are going to go live in the near future.
Aniket Mittal
What would be a battery total installed base, let’s say six months down the line and one year down the line.
Nikhil Dhingra
So 10 gigawatt hours is our total target and of course it is completely dependent on a number of factors in terms of the supply of material, in terms of the connectivity. But as far as connectivity is concerned we can do this 10 gigawatt hours because we do have the connectivities, we do have the financing available, we do have the supply type available. But of course in terms of the various factors which, which are interplay in terms of the supply of material, in terms of you can say geopolitical factors, those are the only uncertainties.
But as far as the CTU linked is concerned and as far as the other dependencies go, it has much less external dependencies than you can say a CTU connected solar plant.
Aniket Mittal
I’ll join back in the queue for further questions. Thank you.
Nikhil Dhingra
Thank you.
Operator
Thank you. Next question is from the line of Ishan from Antique Stockbroking. Please go ahead.
Karthik Sharma
Good one sir. Thank you for taking the question. CELC has recently proposed a new mechanism for alloy based connectivity so wherein the the capacities have been delayed for one year there is a surrendering exit option for those connectivity. So I just want to know how much of aqueous connectivity inventory falls under this and what is your strategy to convert it?
Nikhil Dhingra
Right, right, right. No, that’s a very welcome move from CRC which CRC has done. It’s a discussion paper right now and they will formalize it after getting comments from all. So that’s a good move in terms of how it will work is if you are not able to sign PPAs for. For a certain amount of LOA and you have been and the Renewable Energy Implementation Agency really clarifies that these PPAs cannot be signed then of course that developer is free to develop it in a merchant basis or free to use it in another loa.
As far as we are concerned, you know we have around 6.2 gigawatts of signed PPA which is which we are constructing and so. Which is a very sort of. So our LOAs are more or less converted into PPA. Yeah. In terms of the construction three if you remove the three operational for us we have 3.2 gigawatt of LOA which I’ve converted into PPA which we are constructing. There is 1.8 gigawatts of PPAs. We have won recently and there are Some which are older, you can say around around 850 megawatts of older PPAs which are in various stages of discussions.
But we are not anywhere near to that timeline where we the RIA will say that, right? PPA will not be signed because they are trying their best and all the agencies are trying their best to get it signed. There are various discussions at various forums to get it signed. But just in case if this happens, these will be for us. Our strategy will be to use them for future bids and or to use them for, you can say, for battery connected projects in future. So we will use this connectivity in any case because we have a good pipeline of PPAs where there is a lot of bits which are coming which are now backed by a solid demand from states like thermal mimic which is coming which will require large amount of of capex and large amount of solar and battery.
So and, and there are a lot of other bits which are coming which we will use the connectivity for. So we will keep the connectivity with us and we don’t foresee that our loas will, we will have to surrender. But just in case it happens, we will have a backup plan ready by then.
Karthik Sharma
Got it. That’s very clear. Just to follow up on that and on the industry level only we have seen like around 3.3plus gigawatt of conversion from LOA capacity. And overall on the industry there was a huge buildup of LOA capacity. So how do you see like discount? What types of capacity are the discount preferring to convert from LOA to PPA? And also what is your overall view in the RE tendering momentum in FY27 given the peak demand is growing strong.
Nikhil Dhingra
Right? So the good thing is because of the huge amount of bids which they did, of course more than the demand, most of the developers have a sizable PPAs to execute and that is giving everybody sizable, you can say capex opportunity or revenue opportunity. And of course there are a lot of unsigned PPAs. So in terms of the PPA getting signed and demand coming up, there is a demand for peak power. So which does not have a battery is hard sell as far as the states are concerned. So everybody needs some amount of peak power at least, if not four hours, at least one hour, two hour.
So something which, and if not so plain solar is the hardest to sell. Right? But some states have a typical demand for solar because they are putting up their PSP or they are putting up their thermal is some distance away. So very few states have a plain solar demand. So in terms of the pecking order you can say peak power is selling fastest, the partial peak power is the second second fastest and then the wind is selling well but wind opportunities are very less and people are doing less wind and the solar is selling the slowest.
In terms of the bids for this year we see that the bids will be lesser than last year but the PPS should be faster again because they are not doing bids until the previous ones get at least allocated or signed in some way. So that is. And the RHEA is one. So focus will come in terms of there is only SEKI which will now be aggregating demand so they will have some sort of. You can say aggregation power which being a sole entity gives them in terms of with the states. So they are aggregating demand for let’s say a Tamil kind of tender or peak power tender or a CFD tender which will fine take us because that is purely basis demand.
They are doing wind tender, they are doing PSP tender. There are at least 5 gigawatts of tender currently open with Secchi which has which is 2 gigawatts of wind around some 1 gigawatt of PSP. Then there is this thermal mimic there is CFD so you will see a bit of a level of 15 to 20 gigawatts. Of course this can change depending on the shortage this year so the states can change their behavior and not all states can afford to do state level bids because they’re in little renewable in some states so they’ll continue to buy from SEKI because of the competitive rates which these go.
And also there are some states which will do on their own where also they’ll be successful like southern states or Maharashtra or you can say Gujarat. So so there also you will see some growth and bids coming up like up recently called for a bid wherein they called for a peak power in their own where you could charge from anywhere in the country but the battery installed in their place. So those kind of bits you will see so lot of a lot of peak power is peak power is the something which everybody wants so bits focused around that will be successful.
Manoj Kumar Upadhyay
I would like to add here that although the bit size will be one is capacity in next year this year adding state and seiki will be 20 to 30 gigawatt but the overall solar or overall the capex requirement will be higher than the last year because what is going to happen in the plain Manila source solar 3, 4 crore, 4 crore per megawatt but the current bit which is happening for example mimicking the thermal power or mimicking that long duration storage, solar storage they will be actually they will carry a very large solar behind the battery.
So technically maybe 25 to 30 gigawatt will technically mean solar of 4050 gigawatt. So overall if we see that the name of the actually configuration of the procurement will change but deployment of Solar will remain 40 to 50 gigawatt.
Nikhil Dhingra
Just to add here, even if you look at the CRC connectivity rules when they have asked to put batteries they have made it mandatory to put Solar in the 33 years once you take a connectivity. So the solar is mandatory to be installed if you are taking connectivity under certain guidelines like 5.2 regulation. So they, they also want their connectivity to be appropriately utilized. So you will see battery linked solar installations coming up very fast and pure battery installations will be very less.
Karthik Sharma
Sure. Sure. Just one last question on the standalone battery. Just want to know what is our IRR expected IR from that 550 megawatt project and what is the end of the life value for the vessels and that particular project.
Nikhil Dhingra
So the 550 megawatt hour project is currently basically the tariff is. Is adopted with a caveat. So it is not yet started. But in terms of the. In terms of the IRR for that project you were asking IRR is in again in terms of mid to high teens for that project because there is not much transmission infrastructure to be put. It’s a 33kV level installation and but, but zero date for that project has not started for us. So we have not really finalized the capex because the state regulator has really asked that on the trading margin of NHPC because in this case case it’s a pure leasing and they are getting a vgf.
So it is, it is in terms of the whether they should get a point 5% margin or a 7 paisa margin. So that is being debated. So it is zero date has not yet started for us. We will be able to update you once the zero rate has started. But broadly we are telling you the bid return when we bid it. And also in terms of the end of life assumptions these batteries are basically is slated to run for 8,000 to 10,000 cycles. Right. So in terms of. I think that depends on the ppa. It’s a single cycle or a double cycle.
I think it’s a single single cycle or a double cycle depends on. It’s
Operator
A very small project in the overall portfolio because this is 550 megawatt hours. But correspondingly for
Nikhil Dhingra
Other projects that we have which are 5 gigawatt construction that will require installation of around 17 gigawatt hour of battery. So it’s more just like the small project that you’re talking about. It’s more like a leasing model wherein you are not putting any generation storage, you’re just storing the power which is you are getting from the disk from the discom
Operator
And then you are just discharging the batteries.
Nikhil Dhingra
So those are the bits we have. It’s a one bit out of the portfolio of 8 gigawatt hours. So we are not focusing at all on those bits. And so so and like Ankit mentioned the, the. The batteries which are part of the overall solar, wind and FDRE mix, the peak power mix, those will be you can say 99% of the CapEx. This is less than 1% of the capacity.
Karthik Sharma
Got it sir. Thank you. Those are my questions.
Operator
Thank you. Next question is from the line of Dhruv Muchal from HDFC amc. Please go ahead.
Dhruv Muchhal
Yes, thank you so much. If I look at your gross block increase for the year it’s about 3400 crores yy approximately what you have reported and your run rate EBITDA would have increased by about I think 300 odd crores. Why? So it was 1700 crores last year and it’s about 2000 crores this year. So the cross block to better run rate is about 11x which is very worse off versus what you typically do. I’m just trying to understand what am I missing here.
Nikhil Dhingra
So gross block has increased by around 3000 odd crores. Right. In terms of capitalization. Right. So in terms of the. What you are seeing, not seeing is the. You can say the wind. Wind has not really started performing first of all because wind is got installed in the.
Dhruv Muchhal
That’s included in your run rate of 2000 odd crores, right?
Nikhil Dhingra
No, no. See the run rate EBITDA is basically in terms of the last month it basically got commissioned at the fag end of the. I think it got commissioned at the fag end of the year and so run rate EBITDA is. What you talking about is the reported EBITDA or the run rate of data? The run rate
Dhruv Muchhal
EBITDA. So in Q3 a reported run rate a bit of about 2100 crores. I think largely all your projects were commissioned by then including the wind. Probably small portion was remaining so.
Karthik Sharma
Or
Dhruv Muchhal
Is it probably the gross block number includes the battery which was commissioned by the end of the year for which the run rate EBITDA is not part of. It definitely
Nikhil Dhingra
Includes. It definitely includes the. We can give you the Commission projects for the full. Basically the run rate EBITDA is for the 12 months number we have. I think we don’t have that number in this year because these the whole cross block will not be operating for the 12 months. So.
Arun Chopra
So out of the 3460 crore
Nikhil Dhingra
Roughly thousand
Arun Chopra
To 1100 crores is related to battery. Okay,
Dhruv Muchhal
I think that explains. Yeah,
Arun Chopra
Yeah,
Dhruv Muchhal
Yeah. So that explains it very well. So thousand. If I remove thousand that’s the cross block is increased over 2300 and that explains it.
Operator
Yeah,
Dhruv Muchhal
Perfect. So the second question is on the MNRE clarification that you highlighted now. Does it mean that for a FDRE project if you’re commissioning a battery early, the charging of the battery can happen through a non. Through a conventional power which is now allowed. Is that the approval which we have got or the regulation which has changed?
Nikhil Dhingra
Yes, it is allowed to be sold in in the merchant. Basically it is allowed to be sold outside of the. Because since it’s a non renewable power you can sell it outside the to your not to your off take to anybody you you want till the time you are not installed renewable behind the battery. It is not a renewable power. So it is. That is the clarification they have explained which was already part of the PP but they have clarified it.
Dhruv Muchhal
So for example, for an FDR project
Manoj Kumar Upadhyay
I would like to add it here that even if you have installed the solar panel, if you have not connected with the battery, for example, if you’re a dre, if you’re lt, if your LTA is not right now operational, you. Most of our projects are actually connected with the brownfield of power grid, the substation. That means we can energize our transmission line. We can energize the project well before our our connectivity timeline or our TPA timeline.
Karthik Sharma
What we are
Manoj Kumar Upadhyay
Doing is actually we are installing the solar and we are installing the entire power generation also. But we are not connecting it because the moment we connect it it will be treated as the part of FDRE because the right now in the summer the price is very good. We are not connecting that. We are just connecting the battery and charging from the grid and selling it.
Arun Chopra
That
Manoj Kumar Upadhyay
Is giving us a very good return. So we are, we are doing purposely. But the day that COD timeline comes in LTDA LTA date comes in the whole thing will get integrated and go. And
Nikhil Dhingra
We are defining the CAPEX also on the solar side because it is not doesn’t make sense to call modules that height and keep them here because what we are doing is we are deferring the solar part of capex. We are not installing the modules. We are, because of course you can get the cheaper merchant
Dhruv Muchhal
Power from exchanges and also the
Nikhil Dhingra
Interest during construction is saved. So there is no reason to do a solar capex until your LTO is operational. So we are defining that also which is helping us improve our returns.
Dhruv Muchhal
Sure. And the last question is you mentioned about the commissioning target of your generation assets for this year. But if you can give the number what you’re target targeting to commission based on of generation assets based on whatever transmission visibility you have in megawatt terms.
Nikhil Dhingra
So we are targeting 1.5 gigawatts of projects in this financial year. Right. And around 10 gigawatt hour of battery. So this 10 may be for those projects which are not included in this 1.5 because for 1.5 it will be maybe 5 gigawatt hours. But we are charging the battery ahead of time.
Dhruv Muchhal
Yeah, perfect. Thank you so much and all the best. Thank you.
Nikhil Dhingra
Thank you sir.
Operator
Thank you. Next question is from the line of Dhruvin Shah from HDFC Securities. Please go ahead.
Aniket Mittal
Yeah, hi sir, I think my question was answered in the previous question, but I just wanted to clarify the 10 gigawatt that you said we are planning to commission this year, how much of it would be on merchant basis and what is the kind of EBITDA margins that we can expect on these capacities that operate on merchandise. That’s it.
Nikhil Dhingra
Yeah. So see in terms of the. All of it will start on other than the, you can say around 1200 megawatt hour to 1500 megawatt hour which will be commissioned on the FDRE format because of the NEMA substation which I mentioned earlier, rest of it will be start on the merchant basis in this financial year because the substations will get start charging in the FAG end of the year only. So you will see around 8 1/2 gigawatt hours out of this. 10 gigawatt hours would be on merchants and 1 1/2 gigawatt hours would be in the FDRE format in terms of the EBITDA realization.
Ankit, I’ll request you to
Operator
On the EBITDA margin. Look, it’s a function of
Nikhil Dhingra
At what cost you are procuring and
Operator
Of course at what price
Nikhil Dhingra
You are selling. But assuming you know, a tariff arbitrage of six rupees, which means selling the power at eight rupees, which of course more than that that we are currently seeing and purchasing the power at 2 rupees, so give or take the margin will be around 75 to 80% by better margin.
Aniket Mittal
All right. That was very helpful sir. Thank you.
Operator
Thank you. Next question is from the line of Achal Jalan from Lotus Wealth. Please go ahead.
Achal Jalan
Hello. Thank you for taking my question. So sir, in the first slide for under construction portfolio, a total of 3218 million. Sorry to
Operator
Interrupt you sounding distant. Can you come closer towards the foreign top?
Unidentified Participant
Am I audible now?
Operator
Yes, go ahead. So
Unidentified Participant
My question is that in the first slide for under construction portfolio a total of 3280 megawatt plus 1200 gigawatt hour of this portfolio is given. So by when will this come this be completely commercialized. The whole under construction portfolio.
Nikhil Dhingra
Yeah. There is a second slide also which is. Which is PPA yet to be signed. But on the PPA sign. Yeah. So these will be commissioned by FY28
Unidentified Participant
Putting
Nikhil Dhingra
Up early like you can mention earlier.
Unidentified Participant
Yes. Yes. Okay sir, thank you.
Nikhil Dhingra
Thank you.
Operator
Thank you. Next question is from Naima Sweta Jail Ramanan Rati. Please go ahead.
Achal Jalan
Thank you for taking the question. Couple of questions on this best arbitrage that we’re talking about. You know, using conventional power and then discharging at peak demand. How long do we see that this arbitrage situation should sustain into the future?
Nikhil Dhingra
So this is anybody’s guess in terms of that.
Manoj Kumar Upadhyay
Let me take this answer. Yeah. Actually right now the current calculation of CA is you need around 200 gigawatt hour of battery to come to this. If you don’t add any more solar. But what is happening is also another 40, 50 gigawatt of FDRE and this one where the tender has happened, they will get added in the daytime. So technically what is happening as long as you are adding more and more daytime solar you need a more battery in the unique. So that’s a formula. Right now that formula tells we need a 200 gigawatt hour.
But what has also happened is that the thermal power in the evening there it is already at 6 and a half rupees if you run at full capacity and most of the capacity thermal power cannot come up fast and cannot go down. So they operate around 60, 70% capacity. So considering their capital cost, full capital cost in this one they are around 9 and 10 rupees. So battery will remain. My. My guess is battery will remain at nine to ten rupees in the peak hour time. And as a country we will need around the 200 to 300 gigawatt hours considering the current installation and the planned installation of this year.
But as and when we are adding more and more solar, it will keep on going up.
Nikhil Dhingra
So if you look at the last history, if you look at the last few years, we have seen that the annual price remains at around 7, 7 to 8 rupees for the last few years even when we have low demand. In terms of the last few years we had relatively less demand than before. But even in those slow years we had a realization for peak power for around seven, eight years. But now that the gas is constrained, it is slightly elevated and it is likely to be elevated and we are seeing some peak demand which is much, much higher than last year.
So we see that like, like Manoji mentioned, at least for around four or five years we don’t see this going down.
Achal Jalan
That’s helpful. Secondly, sir, on when you mentioned that, you know majority that almost 80% of our projects would be on the CTU side of the business, wanted to understand the transmission and distribution angle. Are we facing lag in terms of substation connectivity at the stage level or the CTU level from an industry perspective? And how do you see the projects getting commissioned when we shift the portfolio to this 80% mark that we’re looking at?
Nikhil Dhingra
So see in terms of the CTU substations what happens is there is a lot of linkages. They, they are mostly on time with regards to their local infrastructure regarding bay construction and equipment ordering. Where they lag is the components relating to transmission line interconnection and right of way issues because of which there is a timeline delay at their end. And the central transmission utility is in turn dependent on the various various companies which bid for them. So they get a timeline basis the delay on their part.
So the CTU is a very structured entity where they keep give you a firm date every quarter when their subscription is coming coming up. So as far as we are concerned, we plan our project basis that declared date because that’s the obligation on our part to commission the project by that date and we get extension till the time that thing is coming up. So till date they have done a wonderful job of give and take six months delay. They have done a wonderful job of coming up with the transmission capacity and we have also been in sync with that, let’s say a delay of six months.
We also try and sync our capex and sync our work along with that. So as a renewable player we can’t really function without the transmission. So we have to sync up. So there has been a delay. But for a grid of this size and scale, which is the largest in the world, single Grid I think there is a good job. So six month delays. I think very much should be taken in a good light. As far as STU is concerned, we are not building any projects on stu. The Gujarat project of wind we did was the only project we have done on the state grid.
There is no project in our pipeline other than that battery we are installing on the Andhra Pradesh very small 550 megawatt hour. There is no project on the state grid. And state grid is a different organization structure depends on each and every different states are. Some states are more efficient, some states are not. And some states don’t have renewable energy potential so they don’t really develop their grid as much. But states like Gujarat are quite good, I must say. And of course in terms of getting the transmission up and running on time, but it varies from state to state.
But as far as we are concerned, state STU are not a factor. And as far as the portfolio realization and risk and everything is concerned, CTU is a much better place to be in terms of the curtailment and in terms of the predictability of the substation coming up on time and in terms of central grants and monitoring at every level.
Achal Jalan
Got it. And just lastly the. So the project blueprints already factor in the six month kind of a delay on a nominal basis.
Nikhil Dhingra
Yeah. So what we see, typically this can’t be generalized. This is on a, this is on a generic overall portfolio level. But some substations you can say around 60% are on time. The maximum delay is typically 6% months in some cases because of some unfortunate event. It could be more. But typically some, like I mentioned, our image substation is on time. Right. Some substations are delayed. So not every substation is delayed. But where, wherever it is delayed and we know it from now we will not call for our modules.
We will defer our capex. What we can do about it? I can tell you what we can do about it. We can defer our sizable CAPEX of modules because there is no. No, because modules are available just in time and there is sufficient capacity of that available in India. So we will not call for modules because it’s around 60% of a solar plant CAPEX or in sometimes more. So you don’t do that. You keep the service related work ready, the transmission line ready, the substation ready. Because those are typically you can say 20, 25% of the overall project cost.
But these are long lead items. So you do that, you don’t call your modules, you keep your everything else ready and that’s how you defer the capex and that is how the industry has been doing and syncing up with the, with the power grid or ctu. And also you get extensions also the good thing is you don’t get any penalty because of the delay because of this, because. And that’s how the central renewal program has been running because the in sync with the grid.
Achal Jalan
So just one last question. So there is no risk in such cases and on. And there would be no risk in terms of PPA is getting not signed or you know, getting the discomfort, not eager to sign the PPS from the developers perspective.
Nikhil Dhingra
So see that’s a different question. See in terms of the. If you don’t have a connectivity and there are, there are two things on PPA signing bit, right? PPA signing when you go to a discom they look for what is the declared date of your substation, right? And they look for a declared date of substation getting charged in near term, right? So if you are somebody who has a substation getting charged in 2027 you will get a better priority from a discom because customers have more visibility to your project, right?
Because. But if you, if there is somebody whose substation is coming up in if the connectivity he has is for 2029 then he’ll get a second priority, not get a seat at the table, right? Because the state will say I don’t want power in 29, I want in 27. And there are certain ISTS waivers also which are expiring in 2028. So this determines your attractiveness to the customers, right? In terms of the connectivity date, right? So but if they get delayed in future the states also don’t get penalized because they are also part of the same sync up formula where the ISTS waiver also they are eligible for depending on the original date declared by ctu.
So that’s a good regulatory setup where nobody is basically penalized for the delay on behalf on, on the, on the behalf of ctu. Neither the states nor the developer, right Gets penalized because it is something beyond their control, right? The only thing which, which, which a state needs to take care of when they are signing ppa what is the declared date of that substation, right? As long as that is 27, they will get that get the same window of ISPS waiver which is actually applicable during that particular year even if the substation gets delayed to 28 and 29.
Achal Jalan
Okay. Okay, that’s helpful. Thank you so much sir. Thank you so much.
Nikhil Dhingra
Thank you.
Operator
Thank you very much ladies and gentlemen. That will be the last question for today. On behalf of Acme Solar Holdings, Ltd. That concludes this conference.
Manoj Kumar Upadhyay
Thank
Operator
You for joining us. And you may now disconnect your line. Thank you.