GERCs Adoption Of Tariffs For 200 MW Wind-Solar Hybrid Projects In Gujarat

Posted On - 2 August, 2024 • By - King Stubb & Kasiva

Summary

Gujarat Urja Vikas Nigam Limited (GUVNL) filed a petition with the Gujarat Electricity Regulatory Commission (GERC) seeking the adoption of tariffs discovered through a competitive bidding process for the procurement of power from 500 MW grid-connected hybrid power projects.[1] The petition was filed under Section 63 read with Section 86(1)(b) of the Electricity Act, 2003. The main respondents in the case were KPI Green Energy Limited and Juniper Green Energy Private Limited.

Case Timeline

  • 01.11.2023: GUVNL issued a tender for the procurement of power from 500 MW grid-connected hybrid power projects.
  • 16.01.2024: Technical bids were opened.
  • 22.01.2024: Financial bids were opened and an e-reverse auction was conducted.
  • 14.03.2024: Letters of Intent (LOIs) were issued to the successful bidders.
  • 25.06.2024: GERC issued its order.

Issue Raised

The main issue raised in the petition was the adoption of the tariffs discovered in the competitive bidding process by the GERC. GUVNL argued that the tariffs were discovered through a transparent process in accordance with the guidelines issued by the Ministry of Power (MoP). The respondents, KPI Green Energy Limited and Juniper Green Energy Private Limited, did not object to the adoption of the tariffs.

Appellant’s Arguments and Respondent’s Arguments

  • GUVNL’s arguments:
    • The tariffs were discovered through a transparent competitive bidding process in accordance with the guidelines issued by the MoP.
    • The discovered tariffs were competitive and lower than the rates discovered by central bidding agencies in similar tenders.
    • The adoption of the tariffs would help GUVNL meet its renewable purchase obligation (RPO) targets.
  • Respondents’ arguments:
    • KPI Green Energy Limited and Juniper Green Energy Private Limited did not object to the adoption of the tariffs.

Order

The GERC, after considering the submissions of the parties, decided to adopt the discovered tariffs for the procurement of power from grid-connected hybrid power projects. The Commission directed GUVNL to execute power purchase agreements (PPAs) with the successful bidders at the discovered tariffs. The GERC also directed GUVNL to incorporate the clauses of the Electricity (Late Payment Surcharge) Rules, 2022 in the PPAs.

Analysis

The GERC’s order is in line with the provisions of the Electricity Act, 2003 and the guidelines issued by the MoP. The adoption of the tariffs discovered in the competitive bidding process will help promote the development of renewable energy in the state of Gujarat. The GERC’s direction to GUVNL to incorporate the clauses of the Electricity (Late Payment Surcharge) Rules, 2022 in the PPAs will also help protect the interests of the power producers.

[1] https://gercin.org/wp-content/uploads/2024/06/2347-of-2024-GUVNL-Vs.-Ms.-KPI-Green-Energy-Limited-Others.pdf