Gujarat’s 500 MW Solar Tender Receives Strong Response

The tender was floated in January this year

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The Gujarat Urja Vikas Nigam Limited’s (GUVNL) tender to purchase power from 500 MW of grid-connected solar projects (Phase XII) in the state has received a good response and has been oversubscribed.

The bidders’ list includes Ayana Renewable Power, ReNew Power, Aljomaih Energy & Water Company, NTPC, Coal India, Tata Power, Torrent Power, Juniper Green Energy, Sprng Energy, Vector Green, and SJVN, according to Mercom sources.

Earlier this year, GUVNL had floated a tender to purchase power from 500 MW of grid-connected solar PV projects to be set up in the state under Phase XII. Successful bidders are expected to set up the solar PV power projects, including the transmission network up to the delivery point. They must secure all necessary permits and clearances required for setting up the project, including connectivity and land registration.

The project must be designed for power delivery at the Gujarat Energy Transmission Company Limited (GETCO). The Gujarat Energy Development Agency (GEDA) will be the nodal agency for implementing the project. The project must be interconnected with the state and central transmission utility substations directly through a dedicated line or a pooling substation of an existing wind farm.

According to Mercom’s India Solar Tender Tracker, GUVNL has so far floated tenders for 7.65 GW of solar power projects in the state.

In December last year, GUVNL’s (Phase XI) auction for 500 MW of solar projects set a new record. The lowest (L1) tariff reached ₹1.99 (~$0.0270)/kWh in the auction. The tariff was a paisa less than Solar Energy Corporation of India’s (SECI) previous record low tariff of ₹2 (~$0.027)/kWh discovered in its auction for 1,070 MW GW of grid-connected solar projects (Tranche III) in Rajasthan.

The record-breaking tariff of ₹1.99 (~$0.0270)/kWh was quoted by NTPC for 200 MW, Torrent Power for 100 MW, Al Jomaih Energy and Water Company for 80 MW, and Aditya Renewables for 120 MW (under the bucket filling method), respectively.

Following this, GUVNL decided to cancel its earlier auction for 700 MW of solar projects with tariffs ranging from ₹2.78 (~$0.0380)/kWh to ₹2.81 (~$0.384)/kWh and retender it (Phase IX) hoping to discover a lower tariff. The projects were to come up at the state’s Dholera Solar Park. The developers had filed a petition with the Appellate Tribunal for Electricity (APTEL) seeking relief. APTEL in its ruling had directed GUVNL to extend the validity of bids placed by developers in its scrapped 700 MW solar auction by two weeks. It also added not to allocate the capacities awarded to the developers to third parties if it decided to float the 700 MW tender again.

Despite this issue, there has been an enthusiastic response to this 500 MW tender by GUVNL. The developers Mercom spoke to commented that unlike the previous canceled bid which was in Dholera Solar park, in this bid the projects can be set up anywhere in Gujarat. Dholera topography is very challenging reflecting in the tariffs which will not be in this case as the location is not a constraint. GUVNL can expect competitive bids which can be approved. The only glitch will be the basic customs duty (BCD). If GUVNL approves the bids and agreements soon, the developers can procure before BCD kicks in.

Also, on a general note, developers’ appetite to secure projects is growing as they are waiting for the equity to be deployed. SECI’s auctions are far between and the power sale agreements are taking too long stranding project development activity. So there is a rush of the Gujarat auction as the distribution licensee still has a good rating.

Mercom’s flagship event Mercom India Solar Summit, to be held virtually on April 8th and 9th, has an exclusive session to discuss ‘Tenders and Auctions – From Pipeline to PPAs, How We Get There.’ You can click here to register for the event.

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