Gujarat Auctions 700 MW of Solar Capacity, Engie Quotes Lowest Tariff of ₹2.65/kWh

Only 500 MW of solar capacity has been awarded


Engie has emerged as the lowest (L1) bidder in the auction to award 700 MW of solar photovoltaic (PV) projects conducted by Gujarat Urja Vikas Nigam Limited (GUVNL). The solar PV projects will be developed under Phase III of Raghanesda Solar Park.

Malcolm Wrigley, the country manager of Engie India, told Mercom, “We have emerged as the lowest bidder by quoting a tariff of ₹2.65 (~$0.038)/kWh to develop a capacity of 200 MW. We believe that this auction won’t be scrapped.”

Wrigley chose not to comment on the factors that were taken into account to arrive at this bid.

All the bidders who participated in the auction have won. Gujarat Industries Power Company Limited (GIPCL) bid ₹2.68 (~$0.0384)/kWh to set up 100 MW of solar capacity and Gujarat State Electricity Corporation Limited (GSECL) bid ₹2.68 (~$0.0384)/kWh to set up 100 MW of solar capacity.

Tata Power bid ₹2.70 (~$0.0387)/kWh to develop 200 MW but has been awarded 100 MW. It is important to note here that this tender was undersubscribed by 100 MW; bids totaling 600 MW had been submitted against the tendered capacity of 700 MW.

GUVNL had retendered this capacity in March 2019 after it was first issued in September 2018. The ceiling tariff for this tender was ₹2.70 (~$0.0387)/kWh. Tata Power bid at the ceiling tariff itself. Ashish Khanna, MD & CEO Tata Power Solar and President Renewables, Tata Power confirmed that Tata Power Renewable Energy Limited has qualified for 100 MW in the reverse auction conducted for Raghanesda Solar Park.

When contacted, a GUVNL official confirmed that the auction has been completed and 500 MW will be awarded. Elaborating on why only 500 MW has been awarded even though the tender was undersubscribed, the GUVNL official said, “There is a provision in the RfS which says that in case of under subscription, 80% of the capacity that has been bid for will be awarded. In this case, it was 80% of 600 MW (480 MW), and as the solar park will be developed in 100 MW blocks, we rounded it off to 500 MW.”

Talking about the tariffs, the GUVNL official said, “We aren’t completely satisfied with the tariff as they are higher than our expectations. However, as these tariffs were arrived at after us (GUVNL) setting a ceiling tariff, we will have to accept these bids and go ahead and award the contracts.”

The L1 tariff quoted in this auction is ₹0.10 (~$0.0014)/kWh more than the L1 tariff of ₹2.55 (~$0.035)/kWh quoted by Paryapt Solar, a special purpose vehicle by UPC Solar in GUVNL’s 500 MW solar PV auction to develop 50 MW of solar PV projects. This auction was held in February 2019.