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The Gujarat Electricity Regulatory Commission (GERC) has proposed a new tariff framework for the procurement of power from solar energy projects in the state. This move comes in response to the Ministry of Power’s (MoP) notification of the Green Energy Open Access Rules, 2022, aimed at promoting renewable energy sources through open access.
Previously, GERC had adopted competitive bidding for procurement, discontinuing the generic tariff determination regime. However, with the expiration of the previous tariff order in March 2023 and no extension granted, GERC found it appropriate to align with the MoP’s rules and define a new control period effective from April 1, 2023.
The new tariff framework aims to provide clarity for the prospective period of power procurement from solar projects. The government’s ambitious renewable energy goals, as highlighted during COP26, emphasize the importance of aligning with national objectives. Gujarat’s Renewable Energy Policy 2023 further underscores the state’s commitment to harnessing its renewable energy potential, especially solar.
As of March 2023, Gujarat boasts an impressive installed solar capacity of 8,887 MW, making it the second-highest in the country after Rajasthan. To facilitate procurement, the state follows the Tariff Policy 2016, advocating competitive bidding for power procurement by distribution licensees.
For solar projects falling below the threshold limit for competitive bidding eligibility, GERC proposes two options. The tariff would either be determined based on the weighted average tariff from previous competitive bidding rounds or under Section 62 of the Electricity Act, 2003, subject to stakeholder feedback.
Furthermore, the proposed framework addresses various operational aspects, including wheeling of power, energy banking, and metering guidelines. Solar project developers must adhere to technical standards and best practices for grid integration, ensuring grid stability and reliability.
The tariff framework also outlines provisions for sharing benefits such as carbon credits or Clean Development Mechanism (CDM) benefits between project developers and power procurers or licensees. The proposed sharing mechanism gradually increases the share of beneficiaries over time, encouraging equitable distribution of benefits.
Additionally, GERC emphasizes the importance of compliance with Renewable Purchase Obligation (RPO) targets and the use of Renewable Energy Certificates (RECs) for meeting obligations. The commission also highlights the need for timely commissioning of projects and compliance with regulatory standards to ensure uninterrupted power supply.
Stakeholders are invited to provide comments and suggestions on the proposed tariff framework by April 4, 2024. A public hearing will be held on April 5, 2024, allowing stakeholders to express their views on the proposed regulations. GERC’s proposed tariff framework reflects a commitment to promoting renewable energy and aligning with national objectives. By providing clarity on procurement procedures and operational guidelines, the framework aims to foster a conducive environment for solar energy development in Gujarat. |
