Gujarat govt finds getting rid of excess power difficult

Already a power surplus state, Gujarat government’s much tom-tommed campaign to further augment the state’s power generation capacity through solar energy, too, is facing a roadblock. Well-placed Sachivalaya sources said, with another 578.40 MW of solar power all set to be added by end of this month to the overall power capacity of Gujarat of 13,314 MW, thestate government doesn’t know where to use it.

In fact, the state’s march towards solar power will not end this month end with 578.40 MW. “By the middle of this year, we will have, in all, nearly 1,000 MW of solar power plants, highest anywhere in the country. They will be ready for operation within the next two to six months,” a senior official said. Gujarat, a power surplus state by 2,000 MW, is already finding it difficult to sell the traditionally generated power it produces to the national grid and other states, and now solar power is being added to the list.

Out of 170.40 MW of power plants which were commissioned by December 2011, the state-owned Gujarat Energy Transmission Corporation (GETCO), which must use up all the solar power, is unable to evacuate more than five per cent of power. While the official view is, this is a “temporary problem” due to a technical snag which will sorted out soon, insiders suspect this is connected to the “problem of plenty” in the power sector.

Indeed, the state government wants the Government of India (GoI) to share the burden of extra solar power to be produced here by making other states buy solar power as a promotional activity. “We want the Centre to back our solar mission by buying up beyond 500 MW produced in Gujarat”, the senior official underlined.

Already, solar power is proving a drain on coffers. For every unit that the state’s large number of solar power plants produce, the state government signed power purchase agreements (PPAs) to buy power at the rate of Rs 15 per unit. The only precondition was, the power plants should be commissioned on or before January 28, 2012.

After the deadline of January 28, the state government is under pressure from entrepreneurs to continue providing the same rate, instead of going to Gujarat Electricity Regulatory Commission (GERC) for reducing it below Rs 10. “To promote unconventional energy, the state must give more time to entrepreneurs to commission projects instead of discouraging them,” sources in Solar Energy Association in Gujaratopined.

The top solar entrepreneurs who have represented for giving more time include Moser Baer, Lanco, Tata Power Renewable, Sun Edison, Alex Astral, Surana Telecom, to name a few.

“As of today, the state government is adamant. It wants GERC to bring down the rate for buying solar power to Rs 7.49 per unit. This would discourage those coming to invest in the sector,” a source added.

A reduced rate for those commissioning the project is not the only penalty the so-called defaulters may have to face. A senior official said, “Those who fail to commission by March 31, 2012 will have to pay up Rs 10,000 per MW per day of delay. Those who revoke the guarantee will to pay Rs 50 lakh per MW. There is no question of going back on any of these issues.”

Total number of solar power plants to be ‘ready for use’ by January 28, 2012: 54

Capacity: 587.40 MW



Mechanical engineer with experience in Power Plant maintenance , operation and auditing for ISI marked products. MBA in Power Management from National Power Training Institute, Faridabad. Working as Consultant for Bridge to India Pvt. Ltd. Expertise in: 1) Power sector regulations 2) Financial Modelling 3) Project Development solar PV plants 4) Strategic consulting 5) Report writing

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2 Responses

  1. raj says:

    The Rate of power are so high paying consumers would set up captive plants rather than buy from Gujarat .
    The regulation have been framed in such away all wht the Act deleted has been introduced by side doors of regulation framing .
    minister had made the situation clear in GERC praisng event sponsored by IPPAI
    investment in power sector is high as return which are disproportionate to risk involved have been granted by regulatory authorities
    The result is other social infrastructure has been starved of funds

  2. rajesh says:

    Yes Gujarat is the solar capital of India and also biggest in Asia too. Due to ever increasing demand it is necessary for Indian state to take such initiatives to get Surplus power. I have referred book Energy India 2020 to get an idea about the future scenario of power sector in India.

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