GERC Approves Competitive Tariffs for 600 MW Solar Power Procurement at Khavda Solar Park with 600 MW Greenshoe Option

In a significant development for Gujarat’s renewable energy sector, the Gujarat Electricity Regulatory Commission (GERC) has given the green light to tariffs determined through competitive bidding for the procurement of 600 MW of solar power from grid-connected projects at the Khavda Solar Park. Additionally, the GERC has granted a greenshoe option for an additional 600 MW of power.

As per the Commission’s approval, the tariffs for the 600 MW capacity are fixed at ₹2.73/kWh for 200 MW from NHPC, ₹2.88/kWh for 200 MW from SJVN Green Energy (a wholly-owned subsidiary of SJVN), and ₹2.89/kWh for 200 MW from NTPC Renewable Energy. Furthermore, in response to a petition filed by Gujarat Urja Vikas Nigam (GUVNL), the regulator has also sanctioned a tariff of ₹2.73/kWh for procuring the 600 MW under the greenshoe option from the Gujarat Industries Power Company (GIPCL).

The entire procurement process was conducted through a competitive bidding process initiated by GUVNL after issuing a tender on September 29, 2022. The tender received bids from ten entities, collectively offering an impressive capacity of 2,600 MW. Following a transparent e-reverse auction, NHPC, SJVN Green Energy, and NTPC Renewable Energy emerged as the victorious bidders.

To encourage participation, the tender also included provisions for an additional 600 MW capacity through the greenshoe option for government-controlled organizations in Gujarat. Given the limited participation from government entities, GUVNL proceeded with GIPCL for the greenshoe option.

Addressing concerns regarding the higher tariffs for solar park-based projects, GUVNL highlighted the challenging geographical conditions of the Khavda Solar Park, characterized by low-lying areas with silty, clay-rich soil prone to frequent flooding due to nearby water bodies. The Commission analyzed the reasons for higher tariffs and acknowledged GUVNL’s transparent approach in the entire process.

The state regulator directed GUVNL to ensure the signing of power purchase agreements (PPAs) with the successful bidders within 30 days from the issuance of Letters of Intent, which were sent on May 16, 2023. GUVNL has been further directed to publish the names of the successful bidders and the quoted tariffs on its website for a duration of 30 days.

This latest move by GERC is expected to bolster solar power capacity and contribute to Gujarat’s renewable energy goals, setting a positive precedent for the future of sustainable energy in the state.