GERC Approves Tariffs for Procuring 140 MW Wind Power

Gujarat Electricity Regulatory Commission (GERC) has adopted tariffs of ₹3.42 (~$0.04)/kWh for Alfanar Power’s 50 MW wind power and ₹3.44 (~$0.041)/kWh for Juniper Green’s 90 MW of wind power projects in response to a petition filed by Gujarat Urja Vikas Nigam (GUVNL).

The Commission also allowed GUVNL to sign power purchase agreements (PPA) with the project developers.

Background

GUVNL initiated a bidding process for 500 MW of wind power with an additional greenshoe option for up to 500 MW. Four bidders offered a total capacity of 205 MW. The e-reverse auction was conducted for 164 MW.

Two bidders were selected: Alfanar Power for 50 MW and Juniper Green Energy for 90 MW. Bids from RIH Renewables and Solarcraft Power India did not qualify.

The discovered tariffs were higher than previous tenders. A negotiation committee was formed to negotiate the tariffs with the successful bidders. Both bidders maintained their quoted tariffs after negotiations.

GUVNL then filed an interlocutory application to implead Alfanar and Juniper Green respondents in the petition.

The Commission sought to know why the discovered tariffs in this bidding round were higher than the previous round. GUVNL cited lower participation as a reason for higher tariffs and requested both respondents to revise their tariffs. The respondents refused, citing various factors such as pricing trends of wind turbine generators, landed costs, and commodity prices.

They also cited difficulties in securing land conversions in Gujarat. There were also challenges in obtaining consent for right of way and transmission connectivity.

The developers also noted the limited availability of wind turbine generator suppliers and components. They highlighted market volatility, causing sharp rises in prices of copper, steel, aluminum, and cement.

Considering all the factors, GUVNL requested the Commission to adopt the tariffs discovered through the competitive bidding process.

Commission’s Analysis

The Commission noted that higher tariffs were justified due to increased costs related to land acquisition, transmission connectivity, and commodity prices. Despite higher tariffs, augmenting wind capacity was deemed essential to achieve energy transition objectives.

The Commission also noted that the discovered tariffs compared favorably against the recent tariffs discovered by SECI for similar projects at ₹3.61 (~$0.043) – ₹3.88(~$0.046)/kWh.

The Commission adopted the discovered tariffs and allowed GUVNL to sign PPAs with the project developers.

Earlier, GERC adopted the tariff of ₹3.11/kWh (~$0.037) for GUVNL to procure power from 500 MW grid-connected wind power projects in the state under a competitive bidding process.

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