GUVNL recently submitted a petition seeking approval for a mechanism to set tariffs for purchasing power from solar and wind projects. This initiative is part of the Gujarat Renewable Energy Policy-2023. The petition focuses on solar projects ranging from 0.5 MW to 4.0 MW and wind projects between 0.5 MW and less than 10 MW. It also includes a draft Power Purchase Agreement (PPA) related to this policy.
According to the petition, all renewable energy, including solar power, is being procured through a competitive bidding process. The Ministry of Power has issued guidelines for this process, specifying that for solar projects connected to the State Transmission Utility (STU), the minimum bid must be 10 MW. Similarly, for wind projects, the minimum bid requirement is also 10 MW. Therefore, projects below these capacities do not fall under the competitive bidding guidelines.
When questioned by the Commission about how tariffs are determined for these smaller projects, the petitioner’s representative explained that the tariff is based on a pre-fixed levelized rate. This rate is determined by averaging the tariffs discovered and contracted through the competitive bidding process conducted by GUVNL for solar and wind projects over the preceding six months. For solar power, an additional 20 paisa per unit is added to this average. This adjusted rate will apply to the signing of PPAs for the following six months and will remain fixed for the entire 25-year term of the PPA. However, if the generic tariff set by the Gujarat Electricity Regulatory Commission (GERC) is lower, that lower rate will apply instead.
For wind power projects, the process is similar, but without the 20 paisa per unit addition. The tariff will be the simple average of rates discovered and contracted in the previous six months, and it will also be fixed for 25 years. Again, if the GERC determines a lower tariff, that rate will apply.
In cases where the necessary tariff data is unavailable for the preceding six months, the most recent available data will be used. For projects established under specific State or Central Government schemes, the terms and conditions of those schemes will apply, and the tariff will be set by the GERC.
The Commission has requested GUVNL to provide detailed information on tariffs discovered through competitive bidding for solar and wind projects over the last two years. This includes the agreed tariff rates, technical parameters, and the Capacity Utilization Factor (CUF) specified in the PPAs. GUVNL has agreed to submit these details.
Additionally, GUVNL has prepared a draft Standard Operating Procedure (SOP) for purchasing power from solar projects up to 4 MW and wind projects under 10 MW. This SOP was published on the GUVNL website, as well as on the websites of all DISCOMs and GETCO, inviting comments and suggestions from stakeholders and developers within 10 days. These comments, along with GUVNL’s justifications, have been included in the petition.
The Commission noted that GUVNL’s petition also includes a request for approval of the PPA and SOP. Given that this involves setting tariffs and terms for small-scale solar and wind projects, the Commission has decided that a public hearing is necessary to gather input from stakeholders. GUVNL has been instructed to publish a public notice in two Gujarati newspapers and one English newspaper, both with wide circulation in the state. The notice must also be uploaded to the GUVNL website, along with all relevant petition documents. Stakeholders will have 30 days from the notice’s publication to submit their comments, objections, and suggestions to the Commission.
After receiving submissions from stakeholders, GUVNL will file a comprehensive affidavit responding to the comments within 15 days. The Commission’s staff will upload the petition and related documents to their website and share copies of any comments received with the petitioner. The next hearing date will be announced separately.
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