The Gujarat Electricity Regulatory Commission (GERC) has approved the tariff for Gujarat Urja Vikas Nigam Limited (GUVNL’s) 832 MW power procurement from grid-connected wind-solar hybrid power projects (phase II). The total capacity includes base and greenshoe capacity.

The Commission directed GUVNL to sign power purchase agreements (PPA) with the successful bidders at tariffs between ₹3.24 and ₹3.30(~$0.038-$0.039)/kWh for base capacity and ₹3.24(~$0.038)/kWh for greenshoe capacity.

Background

GUVNL floated a tender on February 14, 2024, to procure power from a 500 MW grid-connected wind-solar hybrid power projects (Phase II), with a greenshoe option of up to 500 MW.

It received four bids for an aggregate capacity of 520 MW.

All four bidders with an aggregate 520 MW capacity qualified for the e-reverse auction. As per the tender terms, the eligible capacity for the award in case the total received aggregate bid quantum exceeded 500 MW was 0.8 X the total capacity bid. GUVNL, accordingly, conducted an e-reverse auction for 416 MW capacity on June 6, 2024.

After the e-reverse auction, the four bidders were eligible for 416 MW out of the 520 MW. The remaining balance capacity was 96 MW, exceeding the minimum allocation capacity of 50 MW. As per tender criteria, JSW Neo Energy was declared the successful bidder for 96 MW out of the quoted capacity of 200 MW.

GUVNL arrived at a negotiated tariff with the bidders at ₹3.33-₹3.39(~$0.039-0.04)/kWh for the base capacity of 416 MW and additional greenshoe capacity of up to 416 MW.

Considering tariff discovery’s competitiveness in the previous hybrid phase I and the downward trend in solar module prices, GUVNL asked the developers to reduce the tariff discovered in the e-reverse auction.

The L1 bidder, KPI Green Energy, offered  ₹ 3.30(~$0.039)/kWh, which was ₹0.03(~$0.0003)/kWh lower than its quoted tariff, while L2, L3 & L4 bidders requested time up to July 9, 2024, to submit their reply.

However, GUVNL conducted a third round of rate negotiation with KPI Green Energy, which agreed to a tariff of ₹3.24(~$0.038)/kWh. GUVNL asked Juniper Green Energy, Hinduja Renewables Energy, and JSW Neo Energy for a renegotiated tariff based on L1+2% criteria.

There was a provision for allocating an additional 500 MW capacity through the greenshoe option. Juniper Green Energy and Hinduja Renewables Energy refused to take up the additional greenshoe option.

JSW Neo Energy consented to the offtake of a further 96 MW, and KPI Green Energy offered to take an extra 50 MW under greenshoe at a tariff of ₹3.24(~$0.038)/kWh.

KPI Green Energy was offered the unsubscribed capacity totaling 270 MW.

GUVNL issued a letter of intent to successful bidders at tariffs between ₹3.24-₹3.30(~$0.038-$0.039)/kWh for a total capacity of 832 MW. The bidders agreed to enter a PPA with GUVNL for the negotiated tariff and capacity allocated.

Commission’s Analysis

According to the Ministry of Power’s competitive bidding guidelines, the Commission noted that capacity allocation should be based on bucket-filling.

The bucket size was 500 MW, and the bidders who fall within the range of (and including) the lowest tariff (L1 tariff) +2% of the L1 tariff will be declared successful bidders. Accordingly, after the e-reverse auction, JSW Neo Energy, the L3 bidder, quoted a tariff under the L1 tariff +2%.

GUVL also decided to issue a letter of intent to bidders at not more than the discovered tariff of ₹3.33–₹3.39(~$0.039-$0.04)/ kWh for the base capacity of 416 MW and for additional greenshoe capacity up to 416 MW.

After several rounds of negotiations, the four bidders were allocated a cumulative capacity of 832 MW, including a greenshoe capacity of 416 MW

The Commission approved the tariffs between ₹3.24-₹3.30(~$0.038-$0.039)/kWh for base capacity and ₹3.24(~$0.038)/kWh for greenshoe capacity.

Recently, GERC amended its renewable energy connectivity regulations to transfer connectivity rights in some instances.

GERC also released draft regulations for procuring energy from renewable sources. The “Gujarat Electricity Regulatory Commission (Procurement of Energy from Renewable Sources) Regulations, 2024” aims to align the state’s renewable energy targets with national goals and promote sustainable energy development.