Gujarat Unveils Integrated Renewable Energy And Pumped Storage Policy

The policy comprehensively covers solar, wind, wind–solar hybrid, rooftop solar, floating solar, canal-based solar, and all projects with or without Battery Energy Storage Systems (BESS). BESS has been positioned as a critical pillar for grid stability and peak demand management.

As per the policy provisions, renewable energy projects for captive use and third-party sale will be permitted without any capacity ceiling. For rooftop solar, new mechanisms such as net metering, gross metering, group net metering, and virtual net metering have been introduced. In the agriculture sector, feeder solarisation and agri-photovoltaics will be actively promoted.

The policy provides a clear framework for wind–solar hybrid projects, including the hybridisation of existing projects. To enhance output from ageing infrastructure, a Repowering and Life Extension Policy has been introduced for old and low-capacity wind turbines, with a target to increase energy generation by at least 1.5 times. Renewable Energy Parks with a minimum capacity of 50 MW will receive dedicated incentives.

Emerging technologies such as green hydrogen, tidal, wave, and geothermal energy have been included through pilot projects and Viability Gap Funding (VGF) support. Special incentives have been announced for startups, R&D, AI-enabled smart grids, green jobs, and skill development.

Provisions related to energy banking, wheeling charges, and settlement mechanisms have been simplified in line with GERC regulations. The policy also emphasises Ease of Doing Business through single-window clearances, land allocation, and streamlined grid connectivity.

10-Year Policy, 40-Year Gains for Pumped Storage

Alongside this, the state government has also announced the Gujarat Pumped Storage Policy, aimed at strengthening energy security and grid stability. The policy will be effective for 10 years, while approved projects will receive incentives and benefits for up to 40 years. The state has set a target of installing 75 GWh of storage capacity by 2035.

Issued by the Energy and Petrochemicals Department, the policy aims to facilitate the installation of 100 Pumped Storage Projects (PSPs) by 2027. Given the intermittency and variability associated with large-scale renewable energy deployment, PSPs have been identified as the most reliable long-duration energy storage technology.

Project allocation will be carried out through Tariff-Based Competitive Bidding (TBCB) as well as the nomination route. PSPs have been categorised into four segments:

•    CPSU/SPSU projects
•    Private developer projects
•    Third-party sale / captive use projects
•    Self-identified sites

The policy provides electricity duty exemptions on input renewable energy (full or partial) and relief in water charges. Off-stream PSPs will be exempt from water charges, while on-stream and off-stream open-loop PSPs will be subject to notified rates.

A separate policy framework has been defined for government land allocation, while clear procedures and accountability mechanisms have been laid down for forest and private land.

For projects involving forest land, Rehabilitation and Resettlement (R&R) is mandatory. The policy places strong emphasis on environmental and social responsibility, and encourages CSR initiatives, local employment, and skill development by PSP developers.

GUVNL and GPCL have been designated as Nodal Agencies, with monitoring to be carried out through Apex, State-Level, and District-Level Committees. Full alignment has been ensured with GERC regulations, which will prevail in case of any inconsistency. The state government will retain the authority for policy interpretation and removal of implementation difficulties.