The move by Gujarat Urja Vikas Nigam Ltd, which submitted a petition this month and requested a 28 percent cut in the rate it pays for electricity from solar plants has been strongly opposed by solar developers. The Gujarat Electricity Regulatory Commission will hold its next hearing on the matter on Aug. 5.
Gujarat Urja Vikas Nigam Limited (GUVNL) was established in the year 1999 under the Companies Act, 1956. The GUVNL was created towards restructuring of the power sector for better management.
While the developers maintain that tariff revisions are not possible, GUVNL wants to cut down on tariffs because of the higher profits being earned. The producers argue that each project has an element of risk and such a policy of revising tariffs midway might send a wrong signal to the industry.
A tariff order can be challenged within 60 days according to the rules of the state. It remains to be seen if GUVNL is on solid legal footing considering the fact that it has asked for revision after a period of three years.
GUVNL had filed a petition with the state regulator last month citing unjustified tariff charged by solar developers which had signed agreements for a period of 25 years.
Gujarat is a pioneering state in India in the domain of renewable energy and enacted the country’s first Wind Energy policy in 1993 and a Solar Policy in 2009.
Some other countries have also called for cuts in solar power signalling an about turn in government policies which strongly encouraged the use of solar power and promoted the industry riding on subsidies and attractive tariffs.