Gujarat Revises Renewable Energy Policy to Empower Small-Scale Projects

The Government of Gujarat has issued an amended guideline for procurement of renewable energy (RE) from small-scale projects below the threshold limit, under the Gujarat Renewable Energy Policy-2023 and the Gujarat Electricity Regulatory Commission (GERC) Tariff Orders of 2024.

The amendment clarifies that solar projects up to 5 MW and wind projects up to 10 MW can sell electricity to distribution licensees without the need for a competitive bidding process. This move follows GERC’s tariff notifications, which fixed generic tariffs for projects below these limits, with the intention of supporting distributed renewable energy generation and small-scale developers.

To operationalise the framework, Gujarat Urja Vikas Nigam Limited (GUVNL) has prepared detailed guidelines and a standard operating procedure for the Distributed Renewable Energy Bilateral Purchase (DREBP) mechanism. Developers can register on the 'AkshayUrja Setu' single-window portal, where applications will be processed on a first-come, first-served basis.

The process involves mandatory documentation such as identification, company incorporation papers, and notarised undertakings. A registration fee of INR 10,000 per MW will be charged, and applicants will be required to apply for provisional registration with GEDA before seeking connectivity through the portal. Applications not progressing within stipulated timelines risk cancellation, with fees and rights forfeited.

Eligibility has been clearly outlined. Both individuals and entities, whether incorporated or otherwise, can set up solar projects between 500 kW and 5 MW, and wind projects between 500 kW and 10 MW. Developers must also lay dedicated evacuation lines to Gujarat Energy Transmission Corporation (GETCO) substations. However, projects already tied under PPAs, those under net metering, or ones without new plant and machinery are not eligible. Further, the guidelines restrict project splitting by ensuring that no single developer or its associated entities can interconnect more than one project of the same type at the same substation.

Land acquisition, whether through sale or lease, is the responsibility of developers, with lease periods required to cover the entire PPA term. The guidelines also emphasize strict compliance with Central Electricity Authority (CEA) connectivity norms and GERC’s grid code. Power producers will bear the cost of laying and maintaining evacuation lines, though sharing of common infrastructure is allowed under specific conditions, with a designated “lead generator” coordinating operational responsibilities.

For metering and energy accounting, installation of ABT-compliant meters with remote monitoring is mandatory. Energy accounting will be conducted monthly, overseen by SLDC and DISCOMs, with penalties applicable for any unauthorized consumption of electricity at project sites. Forecasting, scheduling, and reactive power management will follow existing GERC regulations.

Under the DREBP mechanism, PPAs for 25 years will be signed, by DISCOMs for 11 kV-connected projects and by GUVNL for 66 kV connections. Projects must be commissioned within 18 months of PPA signing, with developers required to submit performance bank guarantees of INR 10 lakh per MW. Delays will attract penalties, including encashment of guarantees, and persistent failure can lead to project cancellation. Tariffs have been fixed at INR 2.76 per unit for solar (net INR 2.48 after accelerated depreciation benefit) and INR 3.17 per unit for wind (net INR 2.84 with AD benefit), as per the 2024 GERC tariff orders. Developers must submit undertakings regarding their choice on availing AD benefits, with annual verification through income tax returns.

The guidelines also allow early and part commissioning, provided minimum capacity thresholds are met. Developers can repower plants during the PPA tenure but cannot enhance contracted capacity. A minimum Capacity Utilization Factor (CUF) of 19 percent for solar and 38 percent for wind is required, with penalties for underperformance and no payments for excess generation beyond 120 percent of declared CUF. Projects must use approved modules and turbines listed under the Approved List of Models and Manufacturers (ALMM). For solar, PPAs signed after August 31, 2025, must mandatorily use both ALMM-listed modules and cells, while earlier PPAs are exempted from the cell requirement.

The amended guidelines reflects Gujarat’s push to integrate small and distributed renewable projects into the grid, while ensuring robust technical, financial, and operational safeguards. By simplifying access for smaller developers and setting clear tariff frameworks, the state seeks to accelerate renewable energy deployment and fulfill Renewable Purchase Obligations (RPOs) of DISCOMs, without compromising grid reliability.