Gujarat Sets Tariff of ₹1.75/kWh for Surplus Wind Energy from Captive Projects

The Gujarat Electricity Regulatory Commission (GERC), in a recent order, approved the tariff of ₹1.75 (~$0.023)/kWh for the purchase of surplus power by distribution companies (DISCOMs) from wind power projects built for captive use and third-party sale.

The Commission said that it had already decided the control period for the tariff in its earlier Order, and it will be effective from April 30, 2021, to March 31, 2022.

The Gujarat Urja Vikas Nigam Limited (GUVNL), along with other four subsidiary DISCOMs, had filed a petition seeking approval of the tariff of ₹1.75 (~$0.023)/kWh for the purchase of surplus energy by the DISCOMs applicable from the date of Order for wheeling of power for captive use and third-party sale from wind projects.

Background


Through its Order dated August 30, 2016, the Commission had determined tariff and other commercial aspects for wheeling of wind power, including the rate for purchase of surplus energy by DISCOMs. The control period had expired on March 31, 2019.

GUVNL, in its submission, stated that the competitive bidding route was introduced in 2017 to purchase wind power. In the competitive bidding process, the rate discovered for the purchase of wind energy was comparatively much lower as against the prevailing average power purchase cost rate of ₹3.24 (~$0.043)/kWh.

GUVNL contended that the applicability of the tariff of ₹1.75 (~$0.023)/kWh for the purchase of surplus wind power was in line with the policy decision taken by the Government of Gujarat. To ensure uniformity in the purchase of surplus renewable energy, when there was no significant difference between the market rates of solar and wind power, it was not justified to provide different rates for solar and wind projects.

The DISCOM further added that it was reasonable to allow the tariff of ₹1.75 (~$0.023)/kWh for purchase of surplus wind power set up for captive or third-party sale to maintain equity between the projects set up for sale to DISCOMs on a firm capacity basis and the wind projects selling only surplus power on an infirm capacity.

The DISCOM said that the Commission had issued the tariff order dated April 30, 2020, wherein the purchase of surplus wind power from projects availing open access for captive use and the third-party sale was decided.

Commission’s analysis

The Commission observed that the approval of the suggested rate of ₹1.75 (~$0.023)/kWh for purchase of surplus power by DISCOMs from wind projects would, in turn, help the DISCOMs to provide power supply at reasonable rates to the subsidized category of consumers.

The state regulator noted that the petitioner’s request for the approval of ₹1.75 (~$0.023)/kWh for the purchase of surplus energy from all wind projects to be set up for wheeling of power for captive use or third-party sale was already met in the earlier Order dated April 30, 2021.

However, concerning the petitioner’s request that the tariff of ₹1.75 (~$0.023)/kWh should be applicable from the date of the present Order, the Commission stated that it had already decided the control period for the tariff framework would be effective from April 30, 2021, to March 31, 2022.

Last month, GERC revised the additional surcharge to ₹0.69 (~$0.009)/kWh payable by open access consumers of the state DISCOMs from ₹0.51 (~$0.007)/kWh it had set earlier. The additional surcharge will be payable by open access consumers to the state DISCOMs.

Earlier, GERC had approved a tariff of ₹2.80 ($0.039)/kWh for 202.6 MW of power from grid-connected wind power projects in Gujarat.

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