Gujarat Commission Allows DISCOMs to Procure Power from Small Solar Projects to Meet RPO

The procurement of power by the DISCOM from small distributed generators is an optional program

August 19, 2019


The Gujarat Electricity Regulatory Commission (GERC) has passed an order allowing Gujarat Urja Vikas Nigam Limited (GUVNL) and the other distribution companies (DISCOMs) in the state to procure power from small solar projects of capacity up to 4 MW to meet their renewable purchase obligations (RPO).

GUVNL, Madhya Gujarat Vij Company Limited, Uttar Gujarat Vij Company Limited, Paschim Gujarat Vij Company Limited, and Dakshin Gujarat Vij Company Limited had petitioned the commission seeking approval of the mechanism of applicable tariff for the purchase of power under the state’s policy.  The petitioners had argued that the state policy provides for the procurement of solar energy from small solar PV projects by DISCOMs to meet RPO.

While going through the submissions made, the commission observed, “The procurement of power by the DISCOM from small distributed generators of capacity 0.5 MW to 4 MW under the Policy for Development of Small Scale Distributed Solar Projects 2019 is an optional program where the generator and the DISCOMs are eligible to sell or purchase the energy if they wish to.”

“The program is for the promotion of distributed solar energy generation in the state by providing small generators with an option to set up the solar PV project and sell the energy to the DISCOMs at a rate which is comparatively higher than the rate discovered under the competitive bidding process,” the commission observed.

Stressing on this, the GERC added, “Thus, it is an option given to the small solar generators who desire to sell the energy at the tariff discovered under competitive bidding process plus ₹0.20 (~$0.0028)/kWh (additional). It is not compulsory for the generators to accept the tariff if it is not economically viable for them.”

Making these observations, the state commission approved the mechanism of the applicable tariff for the purchase of power under the state policy as requested by GUVNL and the DISCOMs.

Further, it ordered that the petitioners should state on their websites the applicable tariff on which they will buy the energy generated from small scale distributed solar projects of capacity between 0.5 MW and 4 MW. The rate will be updated every six months.

The petitioners have also been asked to submit statements showing the details of power purchase agreements executed with the small scale distributed solar project generators at the end of every quarter beginning April 1, 2020.

A few weeks ago, Gujarat-based Torrent Power Limited (TPL) had issued a Request for Selection (RfS) for the purchase of power from 300 MW of solar power projects in the state to meet its RPO.

Earlier this year, the commission revised the state renewable purchase obligation for entities in the state for the financial year (FY) 2013-14 retroactively.

Image Credit: Suntech Power