Gujarat Renewable Energy Policy Aims to Harness 36 GW of Solar Potential

The policy will not apply to green hydrogen and green ammonia projects


Gujarat has unveiled its renewable energy policy focusing on leveraging the state’s potential of 36 GW of solar and 143 GW of wind capacity to enable a cost-effective and reliable power supply.

Through the large-scale adoption of renewable energy, the state hopes to transition smoothly to a clean energy regime by deriving synergistic value streams through wind-solar hybrid projects.

The state anticipates an investment of ₹5 trillion (~$60 billion) in the renewable energy sector.

The policy will be in force until September 30, 2028, and will encompass renewable energy projects, including ground-mounted solar, rooftop solar, floating solar, canal-top solar, wind, rooftop wind, and wind-solar hybrid ventures.

Green hydrogen and green ammonia will be covered under a separate policy framework.

The policy aligns with the national target of meeting 50% of the total electricity needs from non-fossil fuel sources by 2030.


Solar power projects that were registered with the Gujarat Energy Development Agency (GEDA) prior to the notification of this policy can benefit from the provisions outlined in the Solar Power Policy of 2021 by ensuring that their registered solar project is commissioned within six months from the date of this policy’s notification.

Wind power projects that have been registered with GEDA under the Gujarat Wind Policy of 2016 before the notification of this policy but have not been commissioned until the effective date of this policy will be eligible to access the benefits outlined in the Wind Power Policy of 2016 if these registered projects are commissioned by December 31, 2023. Projects commissioned after this date will be subject to the Gujarat Renewable Energy Policy 2023.

Energy Settlement and Banking

Consumers who opt for energy banking can settle their renewable energy credits against their actual consumption on a billing cycle basis, subject to the payment of applicable banking charges as determined by GERC. Residential consumers using solar power will be exempt from these banking charges.

In cases where consumers do not engage in energy banking and instead rely on energy from projects registered under the renewable energy certificate mechanism, energy settlements will occur on a 15-minute time block basis, and no banking charges will be imposed.

Energy banking charges will be determined monthly or quarterly, considering data from the preceding month or quarter.

Any unused surplus energy generated by the renewable energy project at the end of the settlement period will be considered inadvertent flow, and distribution companies (DISCOMs) will not compensate for such energy.

As outlined in the GERC tariff schedule, peak-hour charges will be applied to the total energy consumption recorded by the consumer’s meter during peak hours, including any banked energy.

Grid Charges

To facilitate the wheeling of power from renewable energy projects within the state or from external sources to consumers, transmission and wheeling charges, along with associated losses, will be imposed as determined by GERC. These charges will vary based on the location of the renewable facility and the point of consumption.

In the case of hybrid projects intended for captive use or third-party sales, the renewable developer or consumer must secure transmission capacity sanctions or allocations for at least the installed capacity of either wind or solar power, whichever is greater. Transmission losses will apply based on energy feed-in, similar to standard wind or solar projects. However, higher transmission capacity sanctions can be sought if necessary.

In scenarios where the solar and wind components of a wind-solar hybrid project are not located on the same site, the required transmission capacity sanction or allocation will be equal to the combined installed capacity of both wind and solar elements at both locations. Corresponding transmission charges will be levied accordingly.

Injecting renewable power exceeding the sanctioned or allocated transmission capacity within a 15-minute time block will be considered inadvertent power flow. Gujarat Energy Transmission Corporation Limited (GETCO) or distribution licensees will provide no compensation or offset.

GERC will determine pricing for withdrawing reactive power in GETCO and STU Tariff orders.

For wheeling energy from one project to multiple locations for captive use or third-party sale, a fee of 5 paise per unit of energy injected into the grid, as measured at the receiving end sub-station of GETCO or STU, will apply. This fee is in addition to the transmission charges and losses.

Cross-subsidy surcharges and additional surcharges will not be imposed on energy consumption from renewable projects meeting the criteria of captive power projects as per the Electricity Rules 2005. Projects that do not meet these criteria and are considered third-party sale projects will be subject to cross-subsidy surcharges and additional surcharges.

If projects intended for captive use or third-party sale do not utilize the renewable attribute of the project to fulfill their own Renewable Purchase Obligation (RPO) or are not registered under the REC mechanism, the renewable attributes of such projects will be factored into the DISCOM’s renewable purchase obligation calculations.

Purchase of Power by DISCOMs

In the case of Type-A hybrid projects, power procurement from pre-existing wind or solar capacity will align with the terms established in the respective power purchase agreements with the DISCOMs. The acquisition of power from additional or newly established wind or solar capacity will be contingent on tariffs determined through separate competitive bidding procedures conducted by DISCOMs for wind and/or solar power.

Procurement from Solar Projects

DISCOMs are authorized to source power from distributed solar projects with capacities of up to 4 MW at a predetermined levelized tariff, as per the mechanism determined by GERC. This tariff will be calculated as the simple average of tariffs discovered and contracted through the competitive bidding process conducted by GUVNL for solar projects in the preceding 6-month period (either April to September or October to March, as applicable), with an additional 20 paisa per unit. This tariff will remain constant throughout the 25-year PPA term. In cases where GERC establishes a generic tariff for solar projects that is lower than this tariff, the lower tariff will be applicable for solar power procurement from such projects for the entire PPA duration.

Procurement from Wind Power Projects

DISCOMs are empowered to acquire power from small-scale wind power projects with capacities of up to 10 MW at a predetermined levelized tariff. This tariff will be equivalent to the simple average of tariffs discovered and contracted through the competitive bidding process conducted by GUVNL for wind projects in the preceding 6-month period (either April to September or October to March, as applicable). This tariff will remain constant throughout the 25-year PPA term. In cases where GERC establishes a generic tariff for wind projects lower than the aforementioned tariff, the lower tariff will apply. For projects where tariff data for the preceding 6-month period is unavailable, the most recent 6-month tariff data will be considered.

Bank Guarantee

When DISCOMs purchase power under a PPA, the renewable developer must furnish a bank guarantee.

In cases where DISCOMs purchase power from renewable projects not covered, renewable developers must provide a bank guarantee of ₹500,000 (~6,004)/ MW at the time of signing the PPA.

For renewable projects established for captive use or third-party sale, the project developer must submit a bank guarantee, following the connectivity procedure approved by GERC, to the STU or DISCOM, as applicable. If the renewable developer fails to commission the entire evacuation line, including bays and the metering system, within the timeframe, the STU or DISCOM will encash the bank guarantee.

  • For renewable capacity ranging from 1 MW to 100 MW, the evacuation line, bays, and metering system must be commissioned within 12 months from the date of allotment of transmission capacity.
  • For capacity between 100 MW and 200MW, commissioning must occur within 15 months.
  • For capacity between 200 MW and 400 MW, commissioning should be completed within 18 months.
  • Capacity between 400 MW and 1,000 MW requires commissioning within 24 months.
  • For capacities exceeding 1,000 MW, commissioning must occur within 30 months from the transmission capacity’s allotment date.

The renewable developer is obligated to commission the project for at least 10% of the allotted capacity within one month of the evacuation line being energized or according to the timeframe specified earlier, whichever comes first. Failure to do so will result in the developer being liable to pay long-term transmission charges for 10% of the allotted capacity until it is commissioned. The remaining 90% of the capacity must be commissioned within one year of the evacuation line being charged or in line with the timeframe specified, whichever is earlier.

If this condition is not met, the STU will cancel the capacity allocation for the uncommissioned portion, and the developer will not have any claim on this capacity. Relinquishment charges, as determined by GERC, will apply. The STU will also include the canceled capacity in the list of available spare capacity for renewable integration, which will be published on its website for potential consumers.

These conditions will not apply to developers awarded projects through a competitive bidding process.

Green Power Tariff

To facilitate consumers’ voluntary transition to renewable energy sources, DISCOMs will provide 100% renewable energy in response to consumer requests for renewable power. This will be offered at a Green Power Supply Tariff, the rate of which will be determined by GERC periodically.

Grid Connectivity and Power Evacuation

Grid integration will adhere to the Central Electricity Authority’s (Technical Standards for Connectivity to the Grid) Regulations, 2019.

Interconnection specifications with the grid will be determined according to the Gujarat Electricity Grid Code and relevant GERC Regulations. These specifications are based on project capacity (C) as follows:

  • 1 kW < C < 6 kW: 230V, 1 Phase
  • 6 kW < C < 100 kW: 400V, 3 Phase
  • 100 kW < C < 4 MW: 11 kV, 3 Phase
  • C > 4 MW: 66/132/220/400 kV, 3 Phase

Developers of renewable energy parks, including solar, wind, and wind-solar hybrid projects, are responsible for establishing dedicated power evacuation lines up to the STUor Central Transmission Utility (CTU) sub-station. They must also install Remote Terminal Units (RTUs) at their expense.

  • For projects connected to the STU/DISCOM network: A dedicated line is laid up to the sub-station where power injection into the state grid is feasible. STU will grant connectivity according to GERC-approved connectivity procedures and updated lists of available sub-station capacity.
  • For projects connected to the CTU network: Dedicated lines are laid up to the CTU substation or interface based on system studies conducted by the CTU.

Common, dedicated transmission lines are encouraged for clusters of adjacent renewable projects to optimize resources. These lines feature appropriate metering at each project’s end and a shared meter at the STU substation. Energy injection is calculated based on meter readings and apportioned accordingly.

Metering Requirements

Metering and interconnection points are designated at the CTU/STU substation or DISCOM network, depending on where CTU/STU/DISCOM grants connectivity for power injection from the project.

Interface metering must meet the Central Electricity Authority’s (Installation and Operation of Meters) Regulations 2014.

Developers are responsible for installing remote terminal units and communication systems. These systems facilitate real-time data transfer to the relevant Load Dispatch Centre for monitoring.

To account for energy, ABT compliant meter, check meter, and standby meter must be installed at the metering point in accordance with applicable orders, regulations, and codes.

Rooftop Solar

Consumers can install solar projects on their rooftops or within their premises, following the guidelines of net metering or gross metering arrangements.

For projects operating under a gross metering arrangement and supplying power to distribution licensees, the applicable tariff will be determined as the simple average of the tariffs established through competitive bidding conducted by GUVNL during the preceding six months. This rate, along with an additional ₹0.20 (~$0.0024)/ kWh, will be in effect for the subsequent six-month period and will remain fixed for the 25-year duration of the PPA.

Repowering of Wind Projects

Developers with wind turbines, either aged 25 years or nearing this mark at the time of policy issuance, must complete repowering within six months. Developers with agreements expiring or extending within a year from the policy’s issuance are eligible for repowering.

Developers failing to repower must decommission the wind project, surrender connectivity rights, and, if on leased land, relinquish leasehold rights to the government. Repowered projects have a lifespan of 25 years or the actual turbine life, whichever is shorter.

Renewable developers can undertake total or partial repowering without specific limits during the project’s operational period.

If a wind project sells power to DISCOMs, the generation from the existing capacity before repowering must continue per existing PPA terms. Additional generation capacity resulting from repowering may be procured by DISCOMs, following policy guidelines. However, DISCOMs are not obliged to purchase additional power, allowing developers the option to sell or self-consume.

Connectivity and land lease extensions for existing wind projects completing 25 years of operation will only be granted upon repowering.

During repowering, wind projects are exempted from non-availability generation obligations in existing PPAs for up to four months. In the case of wind projects under wheeling arrangements, they may purchase power from the grid during repowering, paying the applicable tariff to the concerned DISCOM.

Sharing of Carbon Credit Benefits

Renewable energy projects qualify for various types of carbon credits, including certified emission reductions, verified emission reductions, gold standards, or any other nationally or internationally adopted standards specific to issuing carbon credits for projects.

In the case of projects established through competitive bidding processes, the developer is entitled to obtain and keep the carbon credits.

Rooftop solar or wind projects implemented under central or state government programs must transfer the carbon credit benefits to DISCOM.

Gujarat was the leading state in installing large-scale solar installations, accounting for 41% of the total installations according to Mercom India Research’s Q2 2023 India Solar Market Update.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry. Top of Form