GERC Evaluates Petition For Revised Renewable Purchase Obligation Targets For FY 2022-23

The GIFT Power Company Limited (GIFT PCL), a wholly-owned subsidiary of Gujarat International Finance Tec-city Company Limited (GIFT CL), has submitted a petition to the Gujarat Electricity Regulatory Commission (GERC) regarding its Renewable Purchase Obligation (RPO) compliance for the fiscal year 2022-23. GIFT PCL operates as a distribution licensee in the GIFT City area, supplying electricity as per the license granted by GERC in 2013.

The GERC has set specific targets for the procurement of power from renewable sources, including wind, solar, and other sources, for distribution licensees. For the fiscal year 2022-23, the RPO targets were set at 8.25% for solar and 8.00% for non-solar energy, totaling 17.00%. Despite their efforts, GIFT PCL faced challenges in meeting these targets due to several factors beyond their control.

The petition outlines that GIFT City, being a developing area, has seen a significant increase in power demand, with base and peak loads expected to rise further by 2025-26. However, GIFT PCL’s power purchase volume remains relatively low compared to other licensees, making it difficult to source renewable energy at competitive rates. To comply with RPO, the company decided to purchase renewable energy from power exchanges under the Green Term-Ahead Market (G-TAM) and Green Day-Ahead Market (G-DAM) segments.

During the fiscal year 2022-23, GIFT PCL attempted to purchase renewable energy at an approved rate of ₹4.50 per unit but faced high market prices and low trading volumes. The average market clearing prices in the power exchanges were significantly higher, making it unviable to purchase renewable energy through G-TAM/G-DAM segments consistently. As a result, the company could only partially fulfill its RPO compliance.

Additionally, GIFT PCL has several distributed solar PV plants installed within its licensee area under net-metering arrangements. The total capacity of these solar plants is 432 kW, and the energy generated from these plants is included in their RPO compliance calculation. Despite these efforts, the total renewable energy procurement for the fiscal year 2022-23 was significantly lower than the required target.

Given these circumstances, GIFT PCL has requested the Hon’ble GERC to revise the RPO targets for the fiscal year 2022-23. They argue that the low RPO quantum, supply constraints, high market prices, and external factors like the global impact of the Russia-Ukraine war, which caused a power crisis and high price discovery in power markets, should be considered valid reasons for the revision.

The company has made several prayers to the GERC, including the admission of their petition for further processing, revision of RPO targets, exemption from RPO compliance for the fiscal year 2022-23, and allowance for future modifications to their application. They also request a reasonable opportunity for a personal hearing before any orders are passed. In conclusion, GIFT PCL has demonstrated its commitment to fulfilling its RPO compliance but has encountered significant challenges beyond its control. The company seeks relief from the GERC to ensure that the RPO targets are realistic and achievable, given the current market conditions and external factors affecting power procurement.

Please view the document here for more details.