Open Access Solar Projects in Gujarat

In my blog today I will analyze what it would mean for any developer to Invest in an Open Access Solar Projects in Gujarat (Refer- Gujarat Solar Policy). Let’s first go over the basics and then analyze the costs an investor will need bear per unit of energy generated.

Basics:

So, when supplying electricity via solar power plant to a customer the maximum that can be supplied is only 50% of the Contract Demand/ Sanctioned Load of the customer. This is a variation from the Policies in other states which don’t have such restrictions (Maharashtra, Telangana, Rajasthan etc)

The tariff will determine all the profits and when pitching to the customer, the developer understands that the tariff needs to be extremely competitive and not just a little below the grid tariff.

Charges (Considering the State DISCOMs):

Source: GERMI Power Blog (refer)

Note: Transmission Charge, Loss and Wheeling losses are calculated taking into consideration a 5MW solar power plant.

Transmission Charge: INR 0.16 (refer)

Transmission Loss: INR 0.26

Wheeling Charge: INR 0.14 (refer page 103)

Wheeling Losses: INR 0.55

Cross Subsidy Surcharge: INR 1.45 (refer to page 105)- 50% exempt for non-REC

Additional Surcharge: INR 0.49 (refer)- 50% exempt for non-REC

Electricity Duty: INR 0 (Exempted)

Charges for non-REC projects= INR (0.16+ 0.26+ 0.14+ 0.55+ 0.725+ 0.245)

                                               = INR 2.08

Hence the realizable tariff for this project comes out to be (considering an offered tariff of INR 6) only INR 3.92. Projects listed under REC will have even more charges, but for the purpose of our discussion, let’s stick with non-REC projects since REC projects are now almost obsolete.

How Investors will make their investments in the state profitable with perhaps, a maximum realizable tariff of INR 3.92, will depend on project to project. With a record low tariff already set (refer), realizable tariff of INR 3.92 should not be very difficult. The upcoming challenges would be a) a win-win between Investor and customer and b) getting approvals from the Gujarat DISCOM (state). Perhaps, regions with private DISCOMs may have lesser roadblocks, but again, it remains to be seen.