The Gujarat Electricity Regulatory Commission (GERC) has approved Torrent Power to adopt the tariff discovered through a competitive bidding process for procuring power from grid-connected solar photovoltaic (PV) projects in Gujarat.
The Commission directed Torrent Power to sign and execute supplemental power purchase agreements (PPAs) for 150 MW capacity under the greenshoe option after adding the late payment surcharge clause.
Background
In January 2019, Torrent Power had floated a tender to procure power up to 300 MW capacity from grid-connected solar PV projects in Gujarat. However, the solar developer reissued the tender to meet its renewable purchase obligation (RPO) in August 2019.
The tender had received a good response and was oversubscribed. The bidders’ list included ReNew Power, Adani Green Energy, Torrent Power, Juniper Green Energy, and Vector Green Energy.
Torrent Power had modified the capacity addition clause to allow another 300 MW capacity under the greenshoe option. The company said it would offer this additional capacity to successful bidders ready to execute PPAs with its distribution division at the lowest tariff discovered in the bidding process.
Eventually, Torrent Power Generation and Adani Green Energy were declared winners in the auction. Adani Green Energy and Torrent Power Generation both quoted a tariff of ₹2.22 (~$0.03)/kWh and secured 150 MW capacity each. Torrent Power Generation also expressed its willingness to execute PPA for another 150 MW capacity under the greenshoe option.
The Commission passed the order to adopt the tariff discovered through a competitive and transparent bidding process.
Commission’s analysis
The Commission asked Torrent Power to submit copies of duly executed PPAs and supplemental PPAs, after adding the late payment surcharge clause, to the Commission.
Torrent Power was directed to publicly disclose the names of the successful bidders and the tariff quoted by them, for 30 days on its website to ensure transparency, after executing the PPAs.
The Commission noted that the additional capacity of 150 MW would help the developer meet power requirements at a competitive rate besides meeting its RPO compliance. GERC pointed out that the move would prove to be beneficial for the end consumers. Torrent Power would be required to sign the supplemental PPAs with the successful bidders accordingly.
Torrent Power had issued the letters of award (LoAs) to the selected bidders on April 12, 2021, it would have to sign the PPAs with them within 30 days from the issuance of the LoAs.
In May 2021, GERC allowed Gujarat Urja Vikas Nigam to adopt the tariff discovered through a competitive bidding process for procuring power from grid-connected solar PV projects in Gujarat.
Last year, in its draft proposal for the amendment of the Electricity Act 2003, the Ministry of Power also proposed for a 60-day window for commissions to adopt a tariff discovered through a transparent bidding process, failing which, the tariff would be deemed to have been adopted.
