Favorable Policies Help Gujarat Become Top State for Solar Open Access in Q2
Captive wind-solar hybrid power projects accounted for 86.6% of the capacity additions
Favorable geography and climate combined with a proactive government catapulted Gujarat to the top position among states for open access solar in the second quarter (Q2) of 2023. Consumers, especially those in the C&I segment, are happy with the savings on their power bills, thanks to open access solar.
Gujarat has just notified the Renewable Energy Policy 2023 with an ambitious goal of developing 100 GW of renewable energy capacity by 2030. This is expected to further enhance Gujarat’s reputation as one of the leading states for renewable energy generation. Gujarat has also formulated one of the best hybrid energy policies in India.
In Q2 of 2023, Gujarat saw a surge in open access solar power capacity, adding over 330 MW, a sixfold growth compared to the previous quarter. Gujarat ranked fourth in the country in terms of total open access solar power capacity as of June 2023. Of this, more than 42% was installed in Q2 alone.
Solar open access installations in the country grew by 24% in Q2 compared to the previous quarter, adding 712 MW of capacity, according to the Q2 2023 Solar Open Access Market Report by Mercom India Research.
In Gujarat, captive wind-solar hybrid power projects accounted for 86.6% of the capacity added during the quarter.
In June, the Gujarat Electricity Regulatory Commission (GERC) issued the draft regulations for green energy open access, including rules for energy banking and other open access charges applicable to consumers.
The most common business models for green energy open access in the state are captive and group captive. Several industries, such as power, textiles, chemicals, jewelry, and iron and steel, have set up captive renewable projects in the state during the quarter.
For commercial and industrial (C&I) consumers with billing demand of more than 2,500 kVA opting for captive solar open access, the savings is about ₹0.36 (~$0.004)/kWh. The savings on the energy charges could be as high as 8% over the existing bills.
Equity Requirement for Captive Projects
Renewable energy expert Santosh Yadav commented, “Captive project approvals previously were restricted as the state demanded 100% equity share, which has now improved under the Gujarat Hybrid Policy”.
Per the Gujarat Hybrid Policy 2018, for group captive projects, 100% of the equity is to be invested by the captive users cumulatively. They are required to consume the entire power generated in the ratio of the equity amount invested with the variation in consumption not exceeding 10% annually.
According to the latest amendment in the Gujarat Hybrid Policy, consumers can set up new wind-solar hybrid power projects or add wind/solar capacity to their existing projects for captive use. This change will permit the consumers with 26% equity in the captive projects to get approval for open access.
Rajni Bhandari from AmpIn Energy said, “The Gujarat government has been quite proactive in allowing the setting up of hybrid power projects. DISCOMs allow the C&I customers to choose their suppliers and are supportive in granting approvals.”
Captive wind-solar hybrid power projects injecting power at 66 kV and drawing power at 11 kV voltage levels to the required locations within the state receive a 50% concession on the wheeling charges.
This significantly reduces the open access charges, and the net landed cost for procuring power from captive hybrid power projects.
Renewable energy expert Ramakrishnan V said, “If we set up a wind-solar hybrid power project in Gujarat, we don’t need to pay separate transmission charges for wind and solar. The higher the transmission charges between the two will apply. We have seen that many states levy transmission charges separately for solar and wind. Also, most of the wind locations were identified by the government, and there was a clear mandate by the DISCOMs on the locations to set up hybrid power projects.”
The energy banking for high tension (HT) consumers for solar projects is on a daily basis, while it is on a monthly basis for wind-solar hybrid power projects, providing greater flexibility in terms of time period for energy settlement.
The state has been favoring wind-solar hybrid power projects over standalone solar projects in its energy banking provisions.
Future Expectation – Contract Demand
Per the Gujarat Hybrid Policy, there is a contract demand cap for wind-solar hybrid power projects. For captive and third-party models, the power contracted from the hybrid power project is 50% of the sanctioned load of consumers for solar and wind, respectively. However, consumers may set up hybrid power projects to meet the renewable purchase obligation without a cap on the contracted demand/sanctioned load.
Ramakrishnan said, “We anticipate a new solar wind hybrid policy to be notified soon. We are waiting for the contract demand cap of 50% on the hybrid power projects to be removed. We are also anticipating a standalone wind policy in Gujarat.”