Gujarat Approves Tariff of ₹2.65/kWh for a 100 MW Solar Project in Raghanesda Solar Park

Gujarat State Electricity Corporation Limited is the bidder


The Gujarat Electricity Regulatory Commission (GERC) has approved a tariff of ₹2.65 (~$0.038)/kWh for a 100 MW solar project under phase VI of the state’s Raghanesda Solar Park. The tariff was quoted by Gujarat State Electricity Corporation Limited (GSECL) under the competitive bidding process conducted by Gujarat Urja Vikas Nigam Limited (GUVNL).

The petition was filed by the GUVNL requesting the regulatory commission to approve the tariff and give its consent to continue with the auction process by issuing the Letter of Award (LoA) to GSECL.

The history of tenders and retenders by GUVNL

There is a long history behind the tenders, retenders, and auction of projects at the Raghanesda Solar Park. The GUVNL first tendered 700 MW of grid-connected solar photovoltaic (PV) projects to be set up under Phase III of Raghanesda Solar Park in September 2018. In the auction that followed in December 2018, tariffs of ₹2.84 (~$0.0406)/kWh to ₹2.89 (~$0.0413)/kWh was quoted. Since these tariffs were considered as high by GUVNL, it later scrapped the auction in January 2019.

Again in March 2019, GUVNL issued a revised Request for Selection (RfS) for the 700 MW solar and added a tariff cap of ₹2.70 (~$0.038)/kWh. The technical bid for this tender was opened in May 2019, and the tender was undersubscribed by 100 MW. In the auction that followed during the same month, tariffs ranged from ₹2.65 (~$0.038)/kWh to ₹2.70 (~$0.0387)/kWh to develop 500 MW of solar projects and the remaining 200 MW was left unallocated. The power purchase agreements for this 500 MW was also approved by GERC in July 2019.

To auction the 200 MW that remained unallocated, GUVNL again issued an RfS in June 2019, re-tendering 200 MW of solar projects. The ceiling tariff for this bid was set as ₹2.65 (~$0.040)/kWh. The bid submission for this tender closed on July 24, 2019, but since GUVNL did not receive any bids, the deadline was moved to August 7, 2019. Finally, after the third attempt, GUVNL received a bid from GSECL offering to develop100 MW at the tariff of ₹2.65 (~$0.038)/ kWh, which was also the ceiling tariff specified in the tender. Apart from GSECL, no other bidders showed interest in developing the projects due to the challenging conditions of the park, adds the petition. This bid was opened on August 16, 2019.

GUVNL later sought the approval of GERC for continuing with the bidding process as there was only one bid due to a lack of competition, which is a rare occurrence. The hearing was on September 16, 2019. The GUVNL referred to the clause, “To ensure competitiveness, the minimum number of qualified bidders should be two. If the qualified bidders are less than two even after three attempts of bidding and the procurer still wants to continue with the bidding process, the same may be done with the consent of the appropriate commission”.

The commission has now approved the tariff, considering the tariff discovered was the lowest in the particular auction.

The commission has also directed GUVNL, to execute the power purchase agreement with GSECL within the time limit stipulated in the RfS document.