The Gujarat Electricity Regulatory Commission (GERC) has recently finalized tariffs for three solar power projects in the state with a cumulative capacity of 1,200 MW and authorized Gujarat Urja Vikas Nigam (GUVNL) to sign the power purchase agreements with the developers.

SJVN Green Energy has been contracted to supply 500 MW of solar power at ₹2.54 ($0.0304)/kWh.

SAEL Industries will supply 200 MW of solar power, with an option to provide an additional 200 MW if required. The tariff rate for the initial 200 MW is ₹2.55 ($0.0305)/kWh. The greenshoe capacity will be supplied at ₹2.54 ($0.0304)/kWh.

Coal India will supply 300 MW of solar power at a tariff of  ₹2.55 ($0.0305)/kWh.

Background

GUVNL invited bids to purchase power from 600 MW grid-connected solar power projects in GIPCL’s renewable energy park at Khavda (GIPCL Stage 1), with an option for an additional 600 MW capacity without energy storage.

Following the tariff-based competitive bidding guidelines, GUVNL shortlisted and qualified four bidders for participation in the e-reverse auction with a cumulative capacity of 1,200 MW.

The e-reverse auction concluded with SJVN Green Energy quoting the lowest tariff (L1) of ₹2.54 ($0.0304)/kWh. According to the auction rules, successful bidders falling within 2% of the lowest tariff could be declared as such at GUVNL’s discretion. SAEL Industries and Coal India, each at a tariff of ₹2.55 ($0.0305)/kWh, were declared the other successful bidders.

The successful bidders were then offered a greenshoe option to expand their capacity at the L1 tariff. SJVN Green Energy accepted an additional 300 MW, bringing its total to 500 MW. SAEL Industries accepted 200 MW for a total of 400 MW. Coal India did not accept the greenshoe option.

GUVNL said the discovered tariffs in this tender are considered competitive compared to other bids in the market, considering the current trends and costs associated with power transmission.

It filed a petition seeking approval from the Commission to adopt the discovered tariffs.

Commission’s Analysis

The Commission noted that the weighted average tariff for the 1,200 MW capacity is ₹2.54 ($0.0304)/kWh – ₹2.51(~$0.03)/kWh. Comparing these tariffs with those of Khavda Park tenders and other central bidding agencies, the current tender’s tariffs fall within the market range.

SJVN Green Energy and Coal India confirmed that GUVNL issued letters of intent at tariffs of ₹2.55 (~$0.0305)/kWh and ₹2.54 ($0.0304)/kWh/kWh.

SAEL Industries stated that it was awarded 400 MW capacity at a weighted average tariff of ₹2.545 (~$0.0304)/kWh under the greenshoe option.

All three developers confirmed they had no objection to the adoption of tariffs.

Considering these factors, the Commission adopted the tariffs and allowed GUVNL to sign power purchase agreements with the project developers.

The Commission recently adopted the tariff of ₹2.81 ($0.033)/kWh quoted by TEQ Green Power, a subsidiary of O2 Power, for a 200 MW solar project at the Dholera Solar Park.

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