Gujarat has introduced new guidelines to promote renewable energy procurement from solar projects up to 5 MW and wind projects up to 10 MW without following the competitive bidding process.

Domestic Content Requirement (DCR) mandate for modules is exempted, allowing more flexibility in component sourcing. However, no financial support from the state or DISCOMs will be available, and the renewable power generated under this policy is not eligible for carbon credits or other renewable energy credits claimed by developers.

The generated renewable energy will be credited to DISCOMs’ renewable purchase obligations.

Eligibility and Project Capacities

Eligible projects include solar projects between 500 kW and 5 MW and wind projects between 500 kW and less than 10 MW. These projects must use new equipment, and multiple projects are limited to a single substation connection.

Developers must establish dedicated transmission lines to the nearest substation operated by the Gujarat Energy Transmission Corporation.

The following projects are not covered under the guidelines:

• Solar and wind projects that have already signed Power Purchase Agreements (PPA)  with any entity prior to the application date.
• Solar projects operating under a net metering arrangement.
• Solar and wind projects that do not utilize new plant and machinery.

Application and Registration Process

Applications are processed on a first-come, first-served basis via the Akshay Urja Setu portal, specifically under the “Distributed Renewable Energy Bilateral Purchase” category.

A non-refundable registration fee of ₹10,000 (~$118)/MW applies, and applicants must secure provisional registration from the Gujarat Energy Development Agency.

Post-registration, developers must apply for grid connectivity within a month, and any delay may result in cancellation and forfeiture of fees.

Grid Connectivity and Interconnection

Grid connectivity depends on project capacity, with interconnection voltages set at 11 kV for projects up to 4 MW and 66 kV for projects above 4 MW. Developers must construct dedicated transmission lines to the connection point and bear the maintenance costs.

To streamline project operations, neighboring developers can share a common transmission line through a pooling station, adhering to the Central Electricity Authority’s technical standards.

PPA Terms 

PPAs must be signed within 15 days of receiving the letter of award, with contracts extending up to 25 years. Solar projects must be commissioned within 12 months of the PPA date, while wind projects have 18 months.

Developers must submit a performance bank guarantee (PBG) of ₹1 million (~$11,863)/MW. Failure to meet these deadlines can result in reduced contracted capacity and forfeiture of the PBG.

The distribution company (DISCOM) will sign the PPA for solar or wind projects connected at the 11 KV level, while GUVNL will sign the PPA for projects connected at the 66 KV level.

Tariff and Accelerated Depreciation Benefits

Tariffs for solar projects up to 5 MW and wind projects below 10 MW are set according to the Gujarat Electricity Regulatory Commission (GERC) orders. Solar project tariffs are priced at ₹2.76 (~$0.033)/kWh, and wind projects at ₹3.17 (~$0.038)/kWh.

A slightly lower tariff applies if developers elect for AD benefits, which reduce taxable income. Compliance with AD declarations is verified annually through income tax returns. AD for solar projects is ₹0.28 (~$0.0033)/kWh and ₹0.33 (~$0.0039)/kWh for wind.

Projects must be commissioned in phases, with part-commissioning allowed to meet deadlines. Solar projects have a minimum capacity utilization factor (CUF) of 19%, and wind projects have a minimum CUF of 38%. Deviations beyond 10% of the declared CUF may incur penalties or be treated as inadvertent energy without remuneration.

Projects must use modules and turbines approved under the ALMM and RLMM lists, ensuring quality and durability. Forecasting, scheduling, and reactive power drawl are regulated by GERC standards, with penalties applied for non-compliance.

Developers can acquire land through purchase or lease, with lease terms covering the PPA duration. Project location changes post-PPA signing is allowed up to the commissioning date but not the interconnection point, ensuring consistency in grid planning.

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