The Gujarat Electricity Regulatory Commission (GERC) has allowed Gujarat Urja Vikas Nigam’s (GUVNL) request to modify the bid documents and the draft power purchase agreement (PPA) for procuring firm and dispatchable renewable energy (FDRE) with energy storage.

The approved deviations cover force majeure, changes in law, bid capacity allocation, excess power treatment, delivery point, transmission risk, project monitoring, demand fulfillment ratio, certification, compliance with the Approved List of Models and Manufacturers (ALMM), and technical requirements.

Background

GUVNL filed the petition under Sections 86 and 63 of the Electricity Act, 2003, seeking approval for deviations from Central Government guidelines for tariff-based competitive bidding to procure power from grid-connected wind, solar, and wind-solar hybrid projects with mandatory energy storage systems.

The original tender, issued on June 14, 2022, after the Commission’s interim permission, sought 500 MW of grid-connected renewable energy with assured peak supply and storage, initially from projects located in Gujarat. The tender used competitive bidding followed by reverse e-auction.

The regulatory framework changed while the case was pending. GUVNL first relied on the 2017 solar guidelines, 2017 wind guidelines, 2020 wind-solar hybrid guidelines, and 2022 battery energy storage system guidelines. The Ministry of Power later revised the guidelines, culminating in the current version finalized in February 2025.

GUVNL argued that rising renewable energy penetration would create grid management challenges and require large-scale storage for stable integration. After stakeholder feedback and the 2023 FDRE guidelines, it revised the bid documents to address force majeure, changes in law, bid capacity allocation, delivery point, excess power, project monitoring, demand fulfillment ratio, compliance with the ALMM, and technical requirements.

Commission’s Analysis

The Commission noted that GUVNL issued public notices and uploaded the petition, interim applications, tender documents, and draft PPA documents on its website for stakeholder comments.

It noted that the June 2023 guidelines referred to government approval and appropriate commission approval. GUVNL therefore obtained approval from the Gujarat government and also sought the Commission’s approval.

The February 12, 2025, amendment clarified that deviations require Commission approval, while preserving government-approved deviations for bids already covered before the amendment.

The regulator accepted GUVNL’s proposal to include a detailed clause covering force majeure events, exclusions, notice obligations, mitigation duties, and relief. The clause treats delays in connectivity or long-term access, and delays in the readiness of ISTS or InSTS infrastructure, as beyond the generator’s control when attributable to the CTU, STU, or transmission licensee, provided the developer complied with applicable procedures. In response to the change in law, GUVNL proposed a narrower clause covering defined statutory events, including taxes, surcharge, cess, safeguard duty, anti-dumping duty, customs duty, and GST, where they directly affect project costs or electricity sales. The Commission accepted this structure and held that other post-bid cost increases should remain part of the developer’s bidding risk.

On bid capacity allocation, the Commission approved GUVNL’s request to allow a bidder, including its parent, affiliate, ultimate parent, or group company, to bid for up to 100% of the tender capacity. The Central Government guidelines provided for a 50% cap on allocation to a single bidder. GUVNL argued that the cap could lead to suboptimal tariff discovery if the lowest bidder could supply the full quantum, but part of the capacity still had to be allocated to a higher-ranked bidder.

In excess power cases, the Commission allowed GUVNL to retain a first right of refusal. The FDRE guidelines permit a generator to sell excess renewable power to third parties or power exchanges without requiring the procurer’s permission. GUVNL proposed that such a sale be subject to its approval, with GUVNL receiving the first option to purchase excess power at the PPA tariff. The developer must inform GUVNL at least 30 days in advance of such excess generation. GUVNL must communicate its consent to procure excess energy within 15 days of the developer’s request, failing which refusal is deemed.

On demand fulfillment ratio (DFR), the Commission accepted GUVNL’s position that DFR is better suited than the capacity utilization factor for FDRE. GUVNL explained that DFR measures scheduled power block-wise against GUVNL’s demand in each time block, whereas CUF measures annual energy generation and does not test time-specific supply. The Commission also accepted that post-commissioning reduction of DFR would affect tariff discovery and the project developer’s energy supply obligation.

The Commission approved minimum DFR thresholds of 90% for peak hours and 80% for off-peak hours, both to apply monthly. It also recorded that the developer must match GUVNL’s demand profile across 96 daily time blocks of 15 minutes each, based on representative monthly day profiles. Penalties for shortfall apply separately for peak and off-peak periods.

On delivery point and transmission risk, GUVNL proposed that power from interstate-connected projects should be delivered into the GETCO grid system. GUVNL would not bear interstate transmission charges and losses during the PPA term. The Commission accepted this structure, placing responsibility for delivery up to the GETCO periphery on the developer.

On project location and storage, GUVNL moved away from the earlier Gujarat-only structure. The final bid framework allowed renewable energy projects anywhere in India and permitted energy storage systems to be part of the project or tied up separately with a third party. The framework also recognized that renewable and storage components may be co-located or located at different sites, while the developer remains responsible for supply obligations under the PPA.

The Commission approved a scheduled commencement of supply date of 24 months from the effective date of the PPA. It also approved a maximum 6-month delayed commencement window with an applicable penalty. It allowed partial commencement of supply, subject to a minimum capacity of 50 MW for the first and subsequent parts, with the last part covering the balance of the contracted capacity.

The Commission approved provisions for early commencement and discrete component supply. Early power may be supplied at the developer’s risk and cost, with GUVNL retaining a first right of refusal and the option to purchase at the PPA tariff, subject to its agreement. If one project component, such as wind, solar PV, or another renewable source, is ready before the remaining components, the developer may supply that component outside the PPA. If GUVNL buys such a discrete-component power, it will pay 50% of the PPA tariff.

The Commission approved generation compensation for offtake constraints due to grid unavailability and reduced offtake as per the guidelines.

During PPA execution, the Commission approved provisions that the PPA may be signed after the GERC adopts the tariff, will run for 25 years from the scheduled commencement of supply, and must be signed within 12 months from the issuance of the letter of intent. If the PPA is not signed within that period, the letter of intent will be canceled. The order also records that no compensation will be payable for a delay in adopting the tariff beyond 60 days.

On project monitoring, the Commission approved milestone reporting and compliance requirements. Developers must submit quarterly project status reports covering registration, connectivity, financial closure, EPC award, module supply agreements, wind turbine generator supply agreements, land acquisition, civil works, erection, and commissioning.

The Commission also approved financial closure within 12 months from the date of PPA execution and land acquisition within 18 months for non-park projects. It approved extension charges of ₹1,000 (~$10)/day/MW, plus GST, with a refund linked to successful commissioning within the scheduled commencement date.

On ALMM compliance, the Commission approved GUVNL’s proposal to update the bid documents in line with the Ministry of New and Renewable Energy’s December 9, 2024, memorandum on the ALMM List 1. The order records that solar modules and solar cells must be sourced from the approved lists valid on the date of dispatch for domestic procurement or on the date of bill of entry filing for imports.

The Commission also approved new technical clauses requiring GPS-enabled automatic weather stations and compliance with applicable cybersecurity regulations, directions, and standards.

Regarding stakeholder feedback, the Commission stated that objections directly bearing on the final proposed deviations had been considered during discussions of the relevant deviations. It did not separately address objections tied solely to earlier versions of the bid documents, as the final deviations had to be considered against the updated FDRE guidelines and subsequent amendments.

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