Gujarat’s 500 MW Solar Tender Undersubscribed by 70 MW

The Gujarat Urja Vikas Nigam Limited (GUVNL) has announced the list of technical bidders for the purchase of power from 500 MW of grid-connected solar projects (Phase VIII). Tata Power, Juniper Green, and Vena Energy have bid to develop 200 MW, 190 MW, and 40 MW respectively. By receiving a total to 430 MW of technical bids, the tender has been undersubscribed by 70 MW.

GUVNL Phase- VIII 500 MW Solar PV Projects

GUVNL official has confirmed to Mercom about the technical bids and added that financial bids and the e-reverse auction would be held on March 16, 2020.

According to the developers Mercom spoke to, the ceiling tariff of ₹2.65 (~$0.037) was too low, resulting in low participation. Stringest clauses, land and evacuation issues are other reasons cited for the lack of interest among developers to bid for this tender.

Earlier, GUVNL had issued a request for selection (RfS) for the purchase of power from 500 MW of grid-connected solar projects (Phase VIII). The maximum tariff payable to the selected bidder was set at ₹2.65 (~$0.037)/kWh.

The successful bidder is expected to set up the solar project, including the transmission network up to the delivery point. The projects would be technology agnostic within the existing photovoltaic technology, the tender further specified. The tender was issued to procure solar against the distribution companies’ renewable purchase obligation (RPO).

According to the tender, solar projects will also be allowed to be set up in the existing wind farm which is already connected to the grid. This will be subject to the availability of spare capacity for renewable integration at the Gujarat Energy Transmission Corporation Limited (GETCO) or Central Transmission Utility (CTU) substation and will also depend on compliance.

According to Mercom’s India Solar Project Tracker, GUVNL has auctioned ~2.4 GW of solar projects under (Phase I to Phase VII). Out of this, Phase I – 500 MW is now operational.

Recently, in an important announcement for the domestic renewable industry, the Ministry for New and Renewable Energy (MNRE) said that upper ceiling tariffs or tariff caps would no longer be prescribed in future bids. It has directed Solar Energy Corporation of India (SECI), National Thermal Power Corporation (NTPC), DISCOMs, and other implementing agencies that they will procure renewable energy (RE) power either through a single renewable source or various combinations of renewable sources with or without storage as per their procurement policies.

The undersubscription of yet another tender confirms that tariff caps have to go to ensure it is a fair and level playing field.

According to Mercom India Research, Gujarat has approximately 2.35 GW of large-scale solar installations, and around 1.94 GW of solar projects are under pipeline as of December 2019. The state DISCOMs are also known for their discipline and timely payments.

Image credit: Greenskies Renewable Energy