Gujarat State Electricity Corporation Limited (GSECL) has submitted a petition to the Gujarat Electricity Regulatory Commission (GERC) to determine the tariff for a 35 MW grid-connected solar photovoltaic (PV) power project that also includes a 57 MWh Battery Energy Storage System (BESS). The project is located at KLTPS and aims to supply clean energy to the state’s electricity grid. GSECL filed the petition under Section 62 of the Electricity Act, 2003, along with Section 86 (1) (a) of the same Act. The company is requesting the tariff determination based on a Power Purchase Agreement (PPA) signed with Gujarat Urja Vikas Nigam Limited (GUVNL).
This project is part of the state’s broader energy reforms that began in 2003 when the Gujarat government passed the Gujarat Electricity Industry (Reorganization and Regulation) Act. As a result of this act, the Gujarat Electricity Board (GEB) was unbundled in 2005, and GSECL was assigned the responsibility of generating electricity in the state.
The GSECL board approved the invitation and finalization of bids for this solar PV project with BESS in July 2021. The approval included engineering, procurement, and commissioning (EPC) work, along with a 12-year operation and maintenance contract. The board also approved entering into a power purchase agreement with GUVNL on a cost-plus basis. After a competitive bidding process, M/s Larsen & Toubro Limited emerged as the L-1 bidder and was awarded the EPC contract in May 2022.
GUVNL gave its in-principle approval to buy electricity from the project on a cost-plus basis in February 2022. According to the petition, the tariff is expected to be determined by GERC by taking into account multiple factors. These include a reduced return on equity (RoE), any Viability Gap Funding (VGF) received from the Ministry of New and Renewable Energy (MNRE), the possibility of operating the battery in dual-cycle mode, and any additional capacity created by oversizing the battery system.
In addition to awarding the main EPC contract to Larsen & Toubro, GSECL also issued a separate work order to Gujarat Energy Research & Management Institute (GERMI) for Project Management Consultancy (PMC) services. The solar power plant achieved commercial operation in stages, with parts of the project becoming operational in March and April 2024.
Later, on August 12, 2024, GSECL and GUVNL officially signed the power purchase agreement. Under this agreement, GUVNL committed to buying electricity from the solar PV project for a fixed tariff as determined by GERC for a period of 25 years.
The petition highlights the role of the Gujarat Electricity Regulatory Commission in regulating the state’s power sector and approving electricity tariffs. GSECL has made it clear that the applicable tariff regulations for this petition are the GERC Multi Year Tariff (MYT) Regulations, 2016, as the project achieved its commercial operation date before the newer regulations of 2024 came into force.
GSECL has asked GERC to approve the total cost of the project and finalize a tariff that reflects the technical and financial structure of the 35 MW solar power plant with the 57 MWh battery energy storage system.
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