Revival of Gujarat solar tariff-cut petition expected to fail

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

The state of Gujarat’s electricity board, Gujarat Urja Vikas Nigam (GUVN) is appealing the rejection of its petition to lower solar tariff rates, but is widely expected to fail.

GUVN is appealing to the Gujarat Electricity Regulatory Commission (GERC) against the regulation’s decision to reject the petition. Gujarat is home to more than half of India’s installed solar capacity.

The petition proposed a cut in solar tariff rates as agreed in closed contracts between the electricity company GUVN and solar project developers.

The ruling affects 88 PV plant contracts, with a combined capacity of 971.5MW or 1550 million kWh of electricity annually.

The petition claimed the agreed average tariff of INR12.54/kWh (US$0.198/kWh) was too high for developers, who were making unfair “windfall” profits. The petition called for the tariff to be reduced, two years after signing contracts, claiming developers had deliberately overestimated project costs.

Solar consultancy firm in India, Bridge to India has previously claimed the petition is “fundamentally flawed” and is unlikely to be accepted.

Madhavan Nampoothiri from business consultancy RESolve India told PV Tech unless GUVNL provided additional arguments to the claim developers are making excessive profits, “the proposed tariff cut will be rejected”.

According to Bridge to India, on the 29 January 2010, the finalised tariff of INR12.54 per kWh was decided by the Gujarat government for solar power based on a capital cost of INR165 million per MW (US$2.6 million per MW). The final project costs ended within INR120-130 million per MW (US$1.90-US$2.05 million) – the petition claims developers deliberately claimed higher project costs, despite there being few installations and higher development costs at the time the tariff was agreed.

Bridge to India’s head of market intelligence, Jasmeet Khurana said the petition was rejected previously from a lack of evidence that developers were making excessive profits, from GUVNL, and they might have submitted more evidence.

Kurana told PV Tech although developers are confident the appeal will not go through “these repeated attempts to seek a tariff revision are extremely negative for investor confidence”.

Nampoothiri concurred “it’s definitely not sending a positive signal”. If the appeal, and then a tariff cut is approved “it will set a bad precedent for the entire sector and will be a big blow to investor confidence”.

Kurana also highlighted the effects of petitioning against already signed and agreed contractual agreements.

“It is a very negative sign that the off-taker is uncomfortable in upholding the existing contractual obligation. As an investor or a lender, there would always be a reason to worry. Also, developers who are looking to sell a stake in their projects will find it extremely difficult to find buyers at the right valuations,” said Kurana.

If the appeal is accepted, the developers will present their case to show that they are not making excessive profits. Kurana said: “This should not be very difficult to prove. Even if the appeal is accepted, I am fairly confident that the verdict will not go against the developers.”

Previous analyses by Bridge to India concluded there is “no reason to believe that the developers are making excessive profits”. The GERC appeal hearing is scheduled for 16 November at 11.30am.

Approximately INR80 billion (US$1.26 billion), invested in Indian solar, is at stake – also other investment in India could be shaken due to the petition towards the overturning of a closed contract spooking investor interest.

19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?
26 August 2021
In this webinar, JA Solar will present its product portfolio based on the latest technologies to improve your PV projects, ensuring maximum reliability and performance. During the webinar we will receive insight from JA Solar about its solar technology roadmap and how the manufacturer is providing customers with innovative solutions to suit their needs, while we will also analyse how to determine the best product solution for each solar project.
6 September 2021
The 38th European Photovoltaic Solar Energy Conference and Exhibition will be held online from 6 - 10 September 2021, allowing PV experts from all around the globe to participate with just one click! The EU PVSEC is the world's leading forum for PV Research and Development and the biggest Conference on PV Solar Energy worldwide. That is why PV experts from all around the globe are keen on gathering together each year to be part of this specialist’s event, to present and discuss the latest developments in Photovoltaics, to network and to conduct business.

Read Next

August 3, 2021
Solar developer Pacifico Energy has started building work on a 121MWdc solar project on the site of a former golf course in Japan, with juwi Shizen Energy hired as engineering, procurement and construction (EPC) contractor.
August 3, 2021
The Australian state of Victoria has unveiled six grid upgrade projects as part of efforts to unlock new renewables investment.
August 3, 2021
AES Indiana, a subsidiary of power distribution company AES Corporation, is planning to acquire and construct a 250MW PV project paired with a 180MWh energy storage facility in Indiana.
August 3, 2021
The government of Serbia has signed an agreement with US company UGT Renewables to cooperate on the construction of solar and energy storage projects in the Balkan country.
August 3, 2021
American solar panel manufacturers Auxin Solar and Suniva have filed a petition with the US International Trade Commission (ITC) to extend a tariff system for cells and modules, despite warnings that it was damaging the US solar industry
August 3, 2021
PV inverter manufacturer SolarEdge Technologies posted record quarterly revenues in Q2, thanks in part to a strong performance in Europe.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021
Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
BRISTOL, UK