Wednesday, February 15, 2012

GERC’s Tariffs for Solar Projects Announced

The Gujarat Electricity Regulatory Commission (GERC) on Friday announced tariffs for solar projects to be commissioned after January 28, 2012, for the second Control Period from January 29 to March 31, 2015. It has kept the tariffs for the period from Jan 29 to March 31, 2013 at Rs9.28 per unit; for the period between April 1, 2013 and March 31, 2014 at Rs8.63 per unit and for the period from April 1, 2014 to March 31, 2015 at Rs8.03 per unit.

GERC said that in view of declining trend in prices of Solar PV, it had decided to reduce the tariff by 7% per year during the second and third years of the Control Period. The Commission said that the new tariff would encourage generation of solar based power.

Earlier, in a major setback to solar power project developers, the energy regulatory body has dismissed their petitions seeking extension of Control Period beyond January 28, 2012, which would have enabled them to charge higher power tariff.

Many solar power developers had approached GERC seeking extension in the Control Period. They put forward a number of reasons, such as land-related issues, changes in jantri rates, delay in finalising jantri rate for non-agricultural land, need for change in project design due to revised land use norms, among others, for delays in commissioning their projects.

The solar power developers had contended that floods due to excessive rainfall had led to delays in project execution. They also pointed to non-availability of evacuation facility by state transmission utility GETCO for the delay. The Commission, however, dismissed the developers' contentions and their petitions. In its order on Friday, GERC said that the petitioners were unable to establish that reasons put forward by them could justify extension of the Control Period.

The GERC's order means that solar power developers, who are unable to commission their projects by January 28, 2012, would not be eligible for availing the existing tariff of Rs15 per unit. The GERC has already initiated the process for determining the tariff for solar projects for the second Control Period, beginning from January 29, 2012.

The state government had vehemently opposed extension of the Control Period. It had pointed out that the capital cost of solar projects had shown a sharp declining trend. It argued that solar tariffs had come down to as much as Rs7.49 per unit in competitive bidding (as against Rs15 per unit offered to solar power developers).

It had argued that extension of control period was not warranted especially because of the market scenario of declining capital cost of solar power projects. Officials said that over 500 MW of solar power generation capacity was likely to be operational by January 28, 2012.


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