Gujarat DISCOMs Seek Approval for A Steep Green Tariff at ₹9.89kWh

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Gujarat’s power distribution companies (DISCOMs) have petitioned the Gujarat Electricity Regulatory Commission (GERC) to approve a green tariff of ₹9.89 (~$0.12)/kWh in the true-up petition filed for the financial year (FY) 2021-22.

This green tariff proposal is nearly 130% of the retail tariff proposed by DISCOM for high-tension consumers.

The proposal for a steep tariff is likely to drive away the consumers from procuring clean energy from DISCOM and choose a more cost-effective option of renewable energy supply through the open access mode.

The Commission is currently considering the proposal.

As per the DISCOMs calculation, the green tariff components include the average pooled power purchase cost at ₹6.96 (~$0.084)/kWh along with the distribution services and cross-subsidy charges of ₹0.67(~$0.0081)/ kWh and ₹2.26 (~$0.027)/kWh respectively.

Statewise Green Power Tariff

Last September, the Tamil Nadu Electricity Regulatory Commission deemed TANGEDCO’s proposal to charge a 150% premium over the HT category’s respective tariff for green energy too high. The Commission approved a 10% premium instead.

In Andhra Pradesh, a green power tariff of ₹12.25 (~$0.15)/kWh is applicable to consumers who wish to voluntarily avail power from non-conventional sources of energy.

Generally, consumers take the DISCOMs’ offering of green tariff when they want the green credit without installing their own solar systems. They can pay a green power tariff in addition to their regular tariff and receive a monthly certificate showing that their power requirements were sourced from renewable energy sources.

The green tariff is higher than the standard retail price for electricity in all states in India. Given the consumers’ price sensitivity of power users in India, it is unlikely that many will be willing to pay the premium to DISCOMs for the green tariff, especially with the availability of the more affordable option in the shape of open access.

As green tariffs are expected to become more popular in states with fewer renewable energy resources these states would need to rework their policy to make charges more attractive.

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