GERC Backs GUVNL, Scraps Gensol’s Battery Storage Project

The Gujarat Electricity Regulatory Commission (GERC) has now given a new jolt to the beleaguered Gensol Engineering Ltd. The state power regulator has now backed the decision of GUVNL to scrap a Battery Energy Storage System (BESS) project, allocated to it through a competitive tender issued by the state discom. 

The state power regulator cited non-compliance of the company with regards to financials and contractual conditions. GERC, in its written order said that Gensol failed to failed to comply with the condition of maintaining the net worth required for the ‘Greenshoe’ option. It was also did not execute the Battery Energy Storage Purcahse Agreement (BESPA). The watchdog also found the company on the fault lines on timely submission of the performance bank guarantee (PBG).

In March 2024, Gensol was able to acquire 250MW/500MWh tender capacity of BESS project with an additional 250 MW/500MWh capacity from GUVNL based on a tariff based comperitibe bidding. It got the project at a storage rate of Rs 372,978 MW per month. 

What Gensol Said?  

In its submission before the regulatory body, Gensol said that the firm had met its provisional net worth of Rs 343.63 crore of Rs 185 crore requirement for the base capacity. Later, the firm said a certificate later even showed net worth upto Rs 494 crore, above the threshold limit. It however, said that it had sought repeated extensions to submit its PBG of Rs 46.25 crore and extension for signing ythe bESPA, citing delays due to administrative actions. 

GERC’s Views

GERC, in its order said that the company flouted the bidding norms and thus was destined for such actions. “The Respondent M/s Gensol Engineering Limited, despite being declared as the successful bidder, has failed to comply with the mandatory post-award obligations, viz., execution of the Battery Energy Storage Purchase Agreement (BESPA) and submission of the Performance Bank Guarantee (PBG) to the Petitioner GUVNL within the prescribed timeframe and even within the extended period granted by the Petitioner,” the order said.

It said that such failure amounted to a “breach of the competitive bidding conditions” and violation of the directives issued by this Commission in its earlier Order dated 03.04.2025. The Respondent’s subsequent reliance on provisional financial certifications does not rectify or substitute for the essential contractual compliance required under the RfS.

Final Order

“Accordingly, the Commission upholds the decision of the Petitioner GUVNL to (i) cancel the allocation of both the base capacity of 250 MW/500 MWh and the additional Greenshoe capacity of 250 MW/500 MWh awarded under RfS No. GUVNL/BESS/Phase III dated 16.03.2024, and (ii) forfeit EMD amounting to Rs. 18.5 Crores, in accordance with the Letter of Intent and Clause 36 of the RfS issued by the Petitioner GUVNL,” the final order of GERC said. 

“The Commission therefore holds that, in the absence of a validly executed BESPA, the question does not arise for approval of adoption of tariff in respect of the present Respondent. The Petition stands disposed of accordingly,” it added.