Solar Energy in Gujarat Some Aspects of Regulatory Decision-making Dr. P. K Mishra Chairman Gujarat Electricity Regulatory Commission Forum on Clean Energy, Good Governance and Electricity Regulation May 2010 Cape Town, South Africa

Gujarat State: Some Features An area of 1,96,000 sq.km. and a population of 56 millions Per capita net state domestic product in : Rs. 49,251 (per capita net national product Rs. 40,141) Per capita consumption of electricity in : 1424 kWh (national average 717 kWh)

Power Sector of Gujarat Total installed capacity (including central sector share) 12,258 MW  Coal MW ( %)  Gas MW (31.17 %)  Lignite MW (8.48 %)  Atomic MW (4.56 %)  Oil MW (1.79 %)  Hydro MW (6.36 %)

Power Sector of Gujarat (Cont.) Installed capacity of wind power – 1790 MW Captive Power Plant (Grid Connected) MW Captive Power Plant (Off the Grid) – 2531 MW Larger potential for solar power  300 days of clear sun  Solar radiation kWh per sq.mt. per day

Earlier Initiatives for Solar Energy in Gujarat Some efforts in 1970s Creation of Gujarat Energy Development Agency (GEDA) in 1979 Schemes targeting individuals, communities, institutions, and sectors such as agriculture and industry Stand-alone solar home light systems in 85 hamlets Solar street lights in municipal towns Solar Photovoltaic systems for uninterrupted power for milk testing in 190 milk collection centres in rural areas Recently, roof-top solar systems on government office and residential buildings

Use of Solar Energy during the last Five Years Item/systemUnitAchievement Families Covered Solar Cookers (Domestic)Nos66593 Solar Cookers (Steam Cooking for Institutions)Nos16 Solar Water heaters (domestic)Lpd Solar Water heaters ( Institutional)Lpd Solar Home light SystemsNos10046 Solar Street light SystemsNos3366 Solar Power Plants ( Grid Connected) 10 kW eachNos.170 Solar Power Plants ( Stand Alone), 1 kW eachNos.125 Solar Wind Hybrid (Stand Alone), 5 nos.kW30 Solar Power Pack, 450 W eachNos.190 Solar Street lights for Municipal townsNos.1750 Solar Pumps ( 2 hp each)Nos66 Source: GEDA

Policy and Legal Framework Government of Gujarat policy of 2001 Electricity Act 2003 and the relevant rules National Electricity Policy and Tariff Policy Scheme of grid interactive solar power generation projects of MNRE 2008 GERC tariff order of 22 January 2009 (for the purpose of the MNRE scheme) CERC Regulations of 2009 on Renewables Government of Gujarat Solar Power Policy 2009 Jawaharlal Nehru National Solar Mission GERC tariff order of 29 January 2010 GERC Regulations on procurement of energy through renewable sources 2010

Some Aspects of GERC Tariff Order of 29 January 2009 A single-part generic levelized tariff Tariff for solar PV: Rs. 15 per kWh for initial 12 years and Rs.5 per kWh for the next 13 years Tariff for solar thermal power projects: Rs.11 and Rs.4 per kWh respectively for the first 12 years and the next 13 years. Tariff order also addresses technical and commercial issues such as transmission, wheeling charges, security deposit, sharing of CDM benefits etc.

Process of Regulatory Decision-making Discussion paper and inviting views of the stakeholders Public hearing Analysis of technical and financial parameters Consideration of provisions of various Acts, rules and policies such as Electricity Act 2003, CERC Regulations, Government of Gujarat Solar Policy etc. Brainstorming session with experts and stakeholders GERC (Procurement of Energy from Renewable Sources) Regulations 2010 envisaging solar power purchase obligation from 0.25 to 1% during to

Issues Addressed during the Process of Regulatory Decision-making How to balance incentives to investors with protection of the interests of consumers for affordable electricity Impact of solar tariff on Annual Revenue Requirement of licensees Sustainability of solar power projects, so that there is no reneging of agreement Problem of inadequate and asymmetric information GERC tariff vis-`a-vis tariff determined by CERC and tariff indicated in Gujarat Government Solar Policy Adequacy of consultation with stakeholders and synthesis of divergent views

Some Reflections Gujarat has taken significant initiatives in the past to harness solar energy GERC is the first State Regulatory Commission to issue a comprehensive tariff order on solar energy GERC is the first SERC to provide for Renewable Energy Certificates in its Regulations on procurement of energy from renewable sources GERC tariff appears to be lower than what was expected by potential investors at the national level; however;  17 Power Purchase Agreements for 234 MW have been signed till 7 May 2010  11 more such PPAs for 211 MW are likely to be signed by end of this month

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