New Guidelines Restrict Short-term Equity Investment in Solar Projects

The Gujarat Urja Vikas Nigam Limited (GUVNL)’s 700 MW grid-connected solar photovoltaic (PV) tender has been oversubscribed by over two times.

A GUVNL official informed Mercom that bids aggregating 1,750 MW have been submitted by interested parties. The projects will be developed under Phase III of Raghanesda Solar Park in Gujarat.

SBG, Tata Power Renewables, Engie, Fortum, Mahindra, Adani Green, and Gujarat Industries Power Company Limited (GIPCL) bid for 250 MW of grid-connected solar PV projects individually, the GUVNL official further informed.

Gujarat’s 700 MW Solar Tender Oversubscribed by Over Two Times

According to Mercom India Solar Project Tracker, the projects will be developed under build own operate basis. The projects are slated to be developed on three plots. While two plots have specifications for 250 MW each, the third one will have 200 MW of solar projects. The bidders could bid for the following capacities: 700 MW, 500 MW, 450 MW, 250 MW, or 200 MW. One must bid for the entire plot or a combination of two or three plots.

As reported previously by Mercom, lowest (L1) tariff of ₹2.44 (~$0.0338)/kWh was quoted in GUVNL’s 500 MW grid-connected solar PV auction. When asked what the tariff expectations for this tender were, the GUVNL official said, “We are expecting tariffs in the range similar to the 500 MW auction we conducted recently.”

GUVNL had tendered the capacity in October 2018. The official also said that the agency is planning to wrap up this auction now and by December 19, 2018 a reverse auction may be conducted.

The 500 MW auction was conducted in the state in order to develop standalone projects and yet such low tariffs were quoted. This auction for solar PV projects in a solar park (where all facilities are provided to developers) and may see some surprising tariffs. The applicable land lease charges at the Raghanesda Solar Park has been set at ₹10,000 (~$136.92)/hectare/year with an increment rate of 15 percent every three years.

Image credit: Azure Power