SMC’s Plea to Enter New PPA for Rooftop Solar with Torrent Power at ₹11.33/kWh Rejected

Torrent Power sought the tariff for a 540 kW rooftop solar project

December 11, 2018


The Gujarat Electricity Regulatory Commission (GERC) has declined a plea filed by the Surat Municipal Corporation (SMC) requesting the commission to direct project developer Torrent Power to enter into a new power purchase agreement (PPA) at a tariff of ₹11.33 (~$0.15)/kWh for a 540 kW rooftop solar photovoltaic (PV) project.

Case Background

In 2014, SMC had requested Torrent Power’s consent to procure energy generated from the proposed 1 MW solar power project according to the tariff determined by GERC.

Torrent Power agreed to procure the power but not at the prevailing levelized generic tariff, but rather at the tariff to be determined by the GERC. Torrent Power requested the SMC to provide details on the cost of the project, its means of finance, and also the capital subsidy available from the central and/or state government for Surat’s Solar City master plan.

Then in March 2014, SMC and Torrent Power executed a PPA for a 750 kW rooftop solar project.

In November 2014, Torrent Power confirmed that it will purchase the power (up to 600 kW) generated from the grid-connected rooftop solar PV project set up by the SMC.

In January 2015, the SMC disclosed the locations of its 540 kW rooftop solar project, and sought an estimate for connectivity at the point of supply for the evacuation of power. Later, towards the end of January 2015, the SMC communicated to Torrent Power to speed up the PPA process.

Then on February 21, 2015, the SMC forwarded the estimated required amount for the evacuation facility. Within a few days, Torrent Power informed the SMC that it would purchase the electricity generated at the rate determined by the GERC.

In March, 2015, SMC forwarded the signed PPA along with the letter of authority to Torrent Power. From April 11, 2015, Torrent Power began to pay for the power procured from March 2015 at the rate of ₹7.049 (~$0.098)/kWh.

On May 29, 2015, the GERC passed an order determining the tariff for the 750 kW rooftop solar PV project of SMC (for which the PPA was executed in March 2014). In the GERC’s order, the principles determining the amount of Central Finance Assistance (CFA) received from the Ministry of New and Renewable Energy (MNRE) were laid to arrive at the project cost and subsequently to calculate the project’s tariff.

GERC’s Views

While examining the submissions made by both the parties, GERC stated that the tariff philosophy it adopted for the 750 kW rooftop solar PPA will also apply to the 540 kW rooftop solar PPA signed by the parties.

While the SMC contended that the tariff determined by the GERC (According to 2012 order) had not been paid by Torrent Power which was a violation of GERC’s regulations and decision. The commission, however, ruled that the move was not a violation.

Moreover, the GERC directed the SMC to come forward with an application for the determination of tariff considering the actual receipt of CFA along with documented evidence.

Recently, GERC passed another ruling on Torrent Power,  when it approved its petitions for the acceptance of deviations from the Ministry of Power (MoP)’s guidelines for the procurement of solar and wind power.

Previously, GERC also issued an order stating that it will support the implementation of Suryashakti Kisan Yojna (SKY) as a pilot project in Gujarat.

In October 2018, GERC issued an order stating that an additional surcharge of ₹0.44 (~$0.0060)/kWh will be applicable in case of open access consumers who avail power through open access from any source other than their respective distribution companies (DISCOMs), and for open access transactions from October 1, 2018, to March 31, 2019.

Saumy Prateek Saumy is a senior staff reporter with covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.