← Policy & Regulation: Pricing and Tariff Control (all topics)
TBCB (tariff-based competitive bidding) vs cost-plus RoE
What it is
Two ways transmission projects are awarded. Tariff-Based Competitive Bidding auctions the project to whoever quotes the lowest transmission charge; the regulated cost-plus route awards it administratively with a regulator-set return on equity
The Draft National Electricity Plan 2026 designates TBCB as the default mode for transmission awards
Impact on industries
- Opens a large addressable pipeline to private developers - clusters evacuating 14 GW from Gujarat RE zones and multi-thousand-crore HVDC schemes are now bid rather than allotted
- Competitive pressure lowers transmission charges for consumers and rewards execution efficiency rather than capital deployment
- Winning bids compress returns, and aggressive bidding against 35-year concessions transfers cost and execution risk entirely to the developer
- Cost-plus incumbents lose their assured-return franchise, and intrastate adoption is uneven - some states have no TBCB projects under construction at all