Gujarat State Electricity Corporation Limited (GSECL) has formally submitted petitions before the Gujarat Electricity Regulatory Commission (GERC) for the determination of project-specific tariffs for its latest portfolio of solar photovoltaic grid-connected power projects. The filings, made under Section 62 and Section 86(1)(a) of the Electricity Act, 2003, seek the approval of capital costs and levelized tariffs for several installations developed under the state’s strategic land allocation framework.
The 2,500 MW Solar Development Scheme
The projects are developed within a regulatory framework established by the Government of Gujarat (GoG) to optimize underutilized land for renewable energy generation. The scheme is governed by two primary directives: Revenue Department G.R. No: JMN-3919-259-A1 (dated 07.03.2019) for land allocation and Energy & Petrochemicals Department G.R. No. SLR/11/2019/675/B1 (dated 16.08.2019) for project implementation.
- Objective: To utilize existing transmission infrastructure near GETCO sub-stations to provide “cheap renewable power” to consumers.
- Land Allocation: Government wasteland is allocated to Public Sector Undertakings (PSUs) at a nominal lease rate of ₹1/- per hectare for a 30-year period.
- Capital Subsidy: The GoG provides a 50% Capital Grant (Capital Subsidy) for the total project cost to ensure lower levelized tariffs.
- Capacity Target: The scheme originally envisioned the development of 2,500 MW of solar capacity by state-owned entities.
Technical and Financial Project Specifics
GSECL has applied for tariff determination for a series of projects, using the 25 MW Palitana installation as the factual and financial model for the portfolio.
Pipeline Projects:
- 35 MW Lakadiya Solar Project: Kutch district.
- 34 MW Chadavada Solar Project: Kutch district.
- 45 MW Badeli Solar Project: Bhavnagar district.
The “Palitana Model” (Factual Reference):
- EPC Contractor: Larsen & Toubro Ltd (L&T).
- Operational Life: 25 years.
- DC/AC Capacity Nuance: The project was originally designed for a 36.48 MW DC capacity. However, following shadow analysis and geographical land limitations, the capacity was frozen at 28.18 MW DC for a 25 MW AC installation.
- Capital Cost Breakdown:
- Total Project Cost: ₹96.33 Crores.
- Contract Value (Supply & Works): ₹95.33 Crores.
- Pre-operative & Supervision Charges: ₹1.00 Crore (included in final capital cost).
- Funding: ₹48.17 Crores from State Government Capital Grant (50%) and ₹48.17 Crores from GSECL internal accruals/equity.
Tariff Determination and Regulatory Framework
A critical distinction in these filings is the application of the GERC Multi-Year Tariff (MYT) Regulations, 2016. Although the Commission notified the MYT Regulations 2024, these petitions are governed by the 2016 framework as the projects achieved Commercial Operation Date (COD) prior to the 2024 notification.
Financial Modeling Assumptions:
- Tariff Basis: Cost Plus Basis as per the Power Purchase Agreement (PPA).
- Debt-Equity Ratio: Normative assumption of 70:30.
- Return on Equity (RoE): Fixed at 14.00% as per Regulation 37 of MYT Regulations, 2016.
- O&M Expenses: Escalated at a rate of 5.25% per annum from the 11th year onwards.
- Interest on Working Capital: Calculated at 11.07% based on GERC Order No. 2418 of 2024.
- Levelized Tariff: After accounting for the 50% Capital Grant, the levelized tariff for the model project is determined at ₹1.82 per kWh.
Commissioning and Commercial Operation
The filing of these petitions is triggered by the issuance of commissioning certificates by the Gujarat Energy Development Agency (GEDA).
- Operational Status: The projects are granted “Must Run” status in accordance with the technical parameters of the state grid code for renewable energy.
- Phased Commissioning (25 MW Bhavnagar Capacity):
- 5 MW (AC) commissioned on May 6, 2022.
- 20 MW (AC) commissioned on June 13, 2022.
- Regulatory Prayer: GSECL is seeking approval for 100% of the determined tariff to be applicable from the date of commercial operation for all commissioned capacities.
- Contractual Relationship: GSECL maintains a 25-year PPA with Gujarat Urja Vikas Nigam Limited (GUVNL) for the entirety of the power generated from these sites.
Leave a Comment