The Gujarat Urja Vikas Nigam Limited (GUVNL) tendered 500 MW of wind to be installed across the state of Gujarat. The bid-submission deadline is July 10, 2017.

The GUVNL has regulated, out of the tendered (500 MW) capacity, 425 MW is open for all and 75 MW can be allotted to central PSUs, state PSUs, and government-controlled organizations, that are willing to execute power purchase agreements (PPAs) with GUVNL at the lowest tariff recorded.

To develop projects, PPAs will need to be signed at the lowest (L1) rate within a period of one month from conclusion of the reverse auction and such an allocation will be made on a first come first served basis.

The bidders will be free to utilize financial incentives like accelerated depreciation, concessional customs and excise duties, tax holidays, and benefits from trading of carbon credits, as available for such projects.

The minimum project size will be 25 MW for bidders other than central and state PSU’s. The successful bidder will need to set up solar PV power projects, including the transmission network up to the delivery point, at their own cost (including but not limited to open access charges to the delivery point).

The PPA will be signed within one month from the date of issue of Letter of Award (LoA) and the PPA will be executed between GUVNL and selected bidders for a period of 25 years from the date of commercial operations. The successful developers will have to secure financing arrangements within nine months of the date of issue of LoA.

The General Manager (IPP) from GUVNL, told Mercom, “In the past, Gujarat used to buy wind power to fulfill its RPO, but now the recent wind auction conducted by Solar Energy Corporation of India (SECI), with wind tariffs falling as low as Rs.3.46 (~$0.051)/kWh, has changed the way the State views the wind sector.”

“The tariff at which we are buying wind at present is much higher than the tariff quoted in the SECI auction. This led us to re-strategize and come up with this tender,” added the GM (IPP), GUVNL.

When asked about the upper tariff ceiling for this tender, the GM replied, “The present Gujarat Electricity Regulatory Commission’s (GERC’s) feed-in tariff for wind in the state will be the upper price ceiling for this tender.” The official further commented, “Reverse auctions in wind is going to be a game changer.”

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Sampath has been part of the Mercom India research and news team since the company’s inception. He currently oversees all data and research relating to news published on the MercomIndia.com platform. Sampath received his Bachelor’s of Commerce Degree from Kuvempu University and Post Graduate Diploma in Management, from Indira Gandhi National Open University. More articles from Sampath Krishna.