Gujarat Proposes to Discontinue Setting Generic Tariff for Wind Projects

Seeks public opinion on its discussion paper on tariff determination

February 7, 2020

/ Wind

The Gujarat Electricity Regulatory Commission (GERC) has invited public opinion on a draft paper discussing issues while determining tariff for procuring power from wind projects.

The commission has released the discussion paper for feedback to initiate the regulatory process for setting the wind power procurement tariff for the financial year. The last date for sending comments is February 25, 2020, while the public hearing has been scheduled for February 28, 2020, at Gandhinagar.

According to the draft, the current installed wind power capacity of the state (as of September 30, 2019) is around 6,174 MW.

In January 2020, the Commission discussed the tariff framework for the procurement of power by distribution licenses from WTGs and other commercial issues.

Key findings from the Discussion Paper:

The Commission proposes to determine the tariff for all prospective wind power projects based on the rates discovered through competitive bidding and discontinue the practice of setting the generic tariff for wind power projects.

The tariff for wind projects that do not qualify for competitive bidding will be the latest tariff discovered through competitive bidding by state-owned DISCOMs and adopted by the Commission.

Regarding transmission and wheeling charges for captive consumption, the Commission has proposed that the wheeling of electricity generated from wind energy generators to the desired location within the state should be allowed on the payment of transmission charges and losses, which applies to an open access consumer. This proposal is for the wheeling of power to the consumption site at 66 kV voltage level and above.

For the wheeling of power to a consumption site below 66 kV voltage level, the Commission proposes that if the injection of power is at 66 kV or above and the withdrawal is below 66 kV, then wheeling of electricity generated from wind projects to the locations within Gujarat should be allowed on payment of transmission charges and losses.

In case the wind power project owners wish to wheel electricity to more than one location, then in addition to the transmission and wheeling charges and losses, they will also have to pay ₹0.05 (~$0.0007)/kWh on energy fed into the grid to the DISCOM.

For third-party sale, the Commission proposes that apart from the payment of transmission and wheeling charges and losses of energy fed to the grid, wheeled energy at the recipient unit will be carried out in the 15-minute time block.  It also proposes a concession of 50% on cross-subsidy surcharge and additional surcharge.

In case of wind power projects availing open access for captive use or third party sale but not opting for renewable energy certificates (RECs), the surplus power after set-off will be purchased by the distribution licensee at the rate of ₹1.75 (~0.025)/ kWh, states the discussion paper.

As a promotional measure, the Commission also proposed to continue the banking facility for one billing cycle for captive wind projects wheeling electricity for its own use.

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

In December 2019, the Gujarat Electricity Regulatory Commission approved a petition filed by Gujarat Urja Vikas Nigam Limited to determine tariffs to procure surplus power from wind projects set up for captive use or third-party sale availing open access in the state.

Image credit: GERC