Adoption Of Competitive Tariffs For 250 MW Battery Energy Storage In Gujarat

Gujarat Urja Vikas Nigam Limited (GUVNL) filed a petition before the Gujarat Electricity Regulatory Commission (GERC) seeking the adoption of tariff rates discovered through a competitive bidding process for procuring storage capacity from a standalone battery energy storage system. The petition was admitted by the Commission, and a detailed hearing was held on the matter.

GUVNL, representing the distribution companies of Gujarat, conducted a transparent bidding process to procure 250 MW / 500 MWh of storage capacity. This process is part of Gujarat’s ongoing efforts to integrate renewable energy sources and enhance grid stability. The competitive bidding process involved the participation of multiple bidders, with the final tariffs being determined through an e-reverse auction.

GUVNL received nine bids offering a total capacity of 1,050 MW/2,100 MWh, significantly exceeding the tendered capacity. After a thorough evaluation, eight bidders qualified for the e-reverse auction. The auction resulted in the discovery of competitive storage rates, with the lowest bid coming from Gensol Engineering Limited at ₹448,996 per MW per month.

Following the auction, GUVNL issued Letters of Intent (LoIs) to the successful bidders. The tariffs discovered were notably lower than those in previous similar tenders conducted by other agencies, indicating a favorable market response and competitive pricing.

The Commission’s review process involved verifying the compliance of the bidding process with the guidelines issued by the Ministry of Power. It was noted that the process was conducted transparently and in line with the approved deviations. The adoption of these tariffs is crucial for meeting the RPO and ESO targets, ensuring the availability of reliable storage solutions, and stabilizing the integration of renewable energy into the grid.

During the hearing, the Commission raised several queries regarding the operational aspects of the battery storage systems, including the type of power to be stored, the verification mechanisms for charging, and the utilization of storage during periods of low renewable generation. GUVNL provided detailed responses, explaining that the storage systems would primarily store surplus wind and solar power, with conventional power being used when renewable energy is insufficient. The Commission was also informed about the measures in place to monitor the storage system’s performance and ensure compliance with the contractual obligations.

The Petitioner emphasized the importance of these storage projects in achieving long-term energy goals, including enhancing grid stability, supporting renewable energy integration, and complying with the increasing RPO and ESO targets. The 12-year duration of the Battery Energy Storage Purchase Agreement (BESPA) aligns with the expected operational life of the battery systems, providing a reliable storage solution for the foreseeable future.

The successful implementation of this storage procurement will pave the way for future projects, contributing to Gujarat’s leadership in renewable energy and energy storage initiatives. The competitive rates discovered through this process reflect the maturing market for battery storage solutions and the potential for cost-effective integration of renewable energy sources.

The Commission acknowledged the comprehensive efforts of GUVNL in conducting a transparent and competitive bidding process. The adoption of the discovered tariffs is a significant step towards achieving the state’s energy storage and renewable energy goals. The decision underscores the importance of continued innovation and investment in energy storage technologies to support the sustainable growth of renewable energy in Gujarat.

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