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Gujarat Wind Energy Tarif 2006

Gujarat Wind Energy Tarif 2006

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Published by Neeraj Singh Gautam

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Published by: Neeraj Singh Gautam on Jun 11, 2011
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August, 2006Order No. 2 of 2006OrderIn the matter of: Determination of price for procurement of powerby the Distribution Licensees in Gujarat from Wind Energy Projects
In exercise of the powers conferred under section 181 read with sections61(h), 62(a) and 86(1)(e) of the Electricity Act, 2003 (Act 36 of 2003) andall other powers enabling it in this behalf, the Gujarat ElectricityRegulatory Commission (the Commission) has determined the price forprocurement of power by Distribution Licensees in Gujarat from windenergy projects.
Discussion paper on Tariff for wind energy projects
 The Commission prepared a discussion paper on “Tariff for wind energyprojects”. The discussion paper was placed on the website of theCommission on 8-05-2006 for inviting comments / suggestions. The lastdate for filing objections/comments on the discussion paper was fixed as31-05-2006. The list of those who have communicated their views isgiven in Annexure –I.
 The Commission has considered the views of the stakeholders and alsoperused the orders of the other SERCs on wind energy tariff. The salientfeatures of tariff as determined by the Commission are discussed below.
 Tariff- Project Specific or generalized
 The Commission’s Regulations on procurement of power fromrenewable sources provide that, the PPAs entered into by GEB,prior to the notification of these regulations shall continue to be inforce for such period as mentioned in those PPAs. The saidRegulations also indicate that while determining the tariff, theCommission will adopt normative parameters for financing cost,O&M and other expenses.As regards normative parameters, the Indian Wind EnergyAssociation (InWEA) submitted that for wind energy projectsnormative/generalized tariff, rather than project specific tariff, isthe preferable approach as this will incentivise efficiency inselection of site, technology, financing package, etc. Howeverproject specific tariff design may be considered, in case a windenergy developer approaches the Commission, with a specificpetition providing rationale and justification for such project-specific tariff. The Commission considers that a general tariff for wind energyprojects is desirable since it will provide an incentive to theinvestors for selecting the most efficient machines and the mostsuitable project locations (besides being non-discriminatory).
Single Part vs. Two Part Tariff 
As wind power is infirm, it is not amenable to grid dispatchinstructions. Most of the costs of wind energy generation are fixed
in nature. For these reasons the Commission had, in its discussionpaper, proposed to have a Single Part tariff for wind power.InWEA, Indian Wind Turbine Manufacturers Association (IWTMA),Indian Wind Power Association (IWPA) and others endorsed theabove view. Therefore, the Commission has decided that there should be singlepart tariff for wind power procurement.
Evacuation Infrastructure
 The Commission had suggested two options in this regard. Underoption-I evacuation infrastructure cost is to be borne by theGETCO/distribution licensee. Under option- II it is to be borne bythe Developers.InWEA suggested that the Commission should only adopt Optionno. II. It has been the past practice. It will avoid any ambiguityfrom tariff as well as implementation angles. Further, for timelycompletion, most of the projects coming up under the VibrantGujarat and other new projects, envisage creation of evacuationfacilities by Developer. NEG MICON mentioned that developershave gained considerable experience in creating power evacuationfacilities. Hence NEG MICON suggested only one tariff mechanismassuming creation of power evacuation facilities throughdevelopers. IWPA also suggested adoption of Option no. II. The Gujarat Urja Vikas Nigam Limited (GUVNL) suggested thatoption-1 (i.e. evacuation infrastructure cost to be borne by theGETCO/distribution licensee) is not viable. GUVNL alsomentioned that it will not be proper in view of Sections 62(3) and

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