The Gujarat Electricity Regulatory Commission (GERC) has approved a predetermined levelized tariff of ₹2.95 (~$0.034)/kWh to procure power from decentralized solar and other renewable energy projects under Component-A of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) program.

This decision follows a petition filed by the state’s four distribution companies (DISCOMs): Paschim Gujarat Vij Company, Madhya Gujarat Vij Company, Uttar Gujarat Vij Company, and Dakshin Gujarat Vij Company.

The Commission directed the DISCOMs to proceed with power procurement at the approved rate for a limited period to facilitate PM-KUSUM’s implementation.

Background

The petition was initiated by the Gujarat DISCOMs seeking approval for the ₹2.95 (~$0.034)/kWh tariff for projects under Component-A of the PM-KUSUM.

The petitioners submitted that the requested tariff was economically viable, lower than their average power purchase cost (APPC), and within the range of recent solar bids.

Additionally, the petitioners said the tariff was calculated considering the Ministry of New and Renewable Energy’s capital cost benchmarks and reasonable returns for developers.

Commission’s Analysis

The Commission observed that the requested tariff was marginally higher than the lowest recent competitive solar tariffs. However, it deemed this difference justified due to the projects’ decentralized nature and smaller scale (up to 2 MW), noting that such projects typically incur higher per-unit costs due to limited economies of scale and comparatively complex grid integration.

The Commission also recognized that the small-scale projects will significantly impact the public policy goals of promoting renewable energy, empowering farmers, and contributing to energy security. Additionally, GERC observed that the tariff was still lower than the petitioners’ APPC and economically viable.

Recently, GERC approved Gujarat Urja Vikas Nigam’s petition seeking tariff approval for 500 MW/1,000 MWh standalone battery energy storage systems discovered through its Phase IV auction.

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