Wednesday, August 21, 2013: Gujarat Electricity Regulatory Commission has turned down a plea by Gujarat Urja Vikas Nigam Ltd., for lowering tariff paid to solar power producers. More than half of India’s solar projects have been executed in Gujarat. Here, developers are arguing against the proposed easing of rates as they are of the opinion that it will adversely affect investment in this sector.
“When private power producers can approach regulatory authorities for upward revision in tariff to safeguard their financial losses due to coal price rise, the state government too had a right to approach the regulator to protect the people’s interest,” Live Mint quoted an official. Moreover, the official stated that the state government may appeal at the Tribunal for Electricity.
The solar policy laid down by Gujarat in the year 2009 intended to install 1000MW capacity for generation of solar energy. This policy was laid down prior to the National Solar Mission. Power-purchase agreement was signed between Gujarat Urja Vikas Nigam and 88 solar power developers for an installed capacity of 971.5MW, which drew investments to the tune of Rs 150 billion (Rs 15,000 crore).
The state had provided a tariff of Rs 15 per kilowatt hour for the first 12 years and Rs 5 a unit onwards that year till the 25th year for solar power projects. According to producers, the rates can be changed only on the basis of mutual consent or when projects are implemented untimely.