Gujarat Urja Vikas Nigam Limited (GUVNL)’s 500 MW grid-connected solar photovoltaic (PV) power projects (Phase IV) tender has been oversubscribed by 545 MW. Bids totaling 1,045 MW were submitted in response to the tendered capacity of 500 MW.
When contacted, a GUVNL official confirmed that the bid-submission for this tender has now concluded. The official though did not disclose the firms participating or capacity bid for by them. GUVNL had tendered the capacity in January 2019, without any upper tariff ceiling.
According to Mercom’s source at one of the participants, “Seven firms have submitted bids for 1,045 MW. Avaada Power and ReNew Power have bid for 250 MW each, Adani Green and Tata Power each submitted bids for 150 MW, Juniper bid for 120 MW, Gujarat State Electricity Corporation Limited (GSECL) bid for 75 MW and UPC Solar for 50 MW.”
The presence of GSECL as one of the bidders could push the tariffs down in this auction. In a 500 MW solar PV auction conducted by GUVNL in September 2017, GSECL and Gujarat Industries Power Company Limited had driven down the tariff way below the ₹2.70 (~$0.038)/kWh mark. At that time, an auction participant had told Mercom that it is not fair to allow government agencies to bid against private solar developers and had attributed the low tariffs in that auction to low bids by government agencies.
Gujarat tenders are sought after because of positive financial position and good payment history of Distribution companies. Last year, four Gujarat state power distribution utilities had the best ratings of A+ according to the “Integrated Rating for State Power Distribution Utilities” report.
There will be uncertainty around this auction if the bids come in too low. We have already seen GUVNL cancel a 500 MW auction last year citing high tariffs.
Gujarat has so far installed approximately 1.4 GW of solar to date, according to Mercom India Project tracker. According to the data from Mercom India Tender Tracker, there are 170 MW of Gujarat tenders from 2017 that are yet to be auctioned.