The tender floated by Gujarat Urja Vikas Nigam Limited (GUVNL) for 700 MW of solar photovoltaic (PV) projects under Phase III of Raghanesda Solar Park has been undersubscribed by 100 MW.

A government official aware of the development told Mercom, “Bids totaling 600 MW were submitted by four bidders. Out of the bidders, two are government companies that have participated in solar tenders before.” The official chose not to comment on why the tender has been undersubscribed.

According to a market source, “Tata Power has bid for 200 MW, Engie has bid for 200 MW, Gujarat Industries Power Company Limited (GIPCL) bid for 100 MW and Gujarat State Electricity Corporation Limited (GSECL) bid for 100 MW.”

When contacted, an executive at Fortum, one of the bidders who had participated and won in the earlier auction, said, “We did not participate as we did not want a repetition of what happened in 2018 tender and auction for the same capacity. GUVNL has done it on two occasions for two different tenders. We have to consider all these factors before participating. This tender has been undersubscribed as a result.”

When contacted, another market source said, “The ceiling tariff is too low, leaving less scope for us. Besides, we are more inclined to participate in central government auctions when it comes to developing projects in Gujarat, we have learned our lessons well.”

Gujarat had retendered this capacity in March 2019 after it was first issued in September 2018. The ceiling tariff for this tender was ₹2.70 (~$0.038)/kWh.

GUVNL had scrapped the auction for the earlier tender citing high tariffs. This was the second time that the state canceled a completed solar auction and it seems to reflect in bidder participation and sentiment now.

In a recent solar PV auction held in Gujarat, Tata Power had placed bids which were way above the ₹2.70 (~$0.038)/kWh mark. Recently, Tata Power announced that it will not build any new coal-fired power project in the future and the majority of its power capacity expansion will happen through renewable energy.