The Gujarat Electricity Regulatory Commission (GERC) has approved a tariff of ₹3.70 (~$0.043)/kWh for the procurement of 9.9 MW of wind-solar hybrid renewable energy by a power distribution licensee in the GIFT City in Gujarat.

Background

The petitioner, GIFT Power Company (GIFT PCL), had initiated power procurement through open access as a distribution licensee in May 2019.

GIFT PCL has relied on a mix of short- and medium-term PPAs, the day-ahead market, and real-time market power purchases.

However, with demand expected to increase from a base of 5 MW in the financial year (FY) 2025 to 20 MW by FY 2030, and peak load potentially reaching 40 MW, the company is shifting to long-term renewable sourcing to fulfill its universal service obligation and meet renewable purchase obligations.

To ensure the long-term reliability of power and mitigate the risk of fluctuating electricity prices, the petitioner plans to procure 9 MW of wind-solar hybrid power from developers by executing power purchase agreements (PPA) for 25 years.

In response to  an expression of interest in August 2024 to procure 9 MW of hybrid renewable power, GIFT PCL  received four bids.

Prozeal Green Energy emerged as the lowest-cost (L1)bidder, offering 9.9 MW at a tariff of ₹3.70 (~$0.043)/kWh and a landed cost of ₹4.30(~$0.050)/kWh.

The petitioner sought the Commission’s approval for the discovered tariff.

Commission’s Analysis

The Commission noted that the petitioner, as a distribution licensee, has a Universal Service Obligation to ensure uninterrupted electricity supply to consumers within the licensee’s area.

It also noted that the petitioner operates in a fully greenfield area where development is progressing rapidly. It is expected that by FY 2027-28, the base demand will rise to approximately 10 MW, with average and peak demands reaching 15 MW and 20 MW, respectively.

The Commission stated that electricity demand in the licensee area is becoming more stable, making it essential to establish long-term power purchase arrangements.

It noted that the petitioner, after exercising commercial prudence and considering the power market volatility, is in the process of executing a long-term power purchase agreement for 9.90 MW wind-solar power.

The regulator found the discovered tariff reasonable and in the public interest. The project will contribute to the state’s renewable energy targets and energy security.

Approving the tariff of ₹3.70 (~$0.043)/kWh, it and directed the petitioner to execute the PPAs with the successful bidder.

In May, GERC approved a tariff of ₹2.83 (~$0.033)/kWh for solar projects installed under Component-C of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan program.

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