Gujarat Urja Vikas Nigam Limited (GUVNL) has reissued tenders to purchase 800 MW of solar power from grid-connected solar projects at the Dholera and Raghanesda Solar Parks in the state.

The first tender is for 700 MW of solar projects (Phase IX-R) to be set up at the 1 GW Dholera solar park. The second tender is for developing 100 MW of solar projects (Phase X-R) at the Raghanesda Solar park.

Both tenders require bidders to submit an earnest money deposit of ₹400,000 (~$5,510)/MW. The deadline for bid submissions for both tenders is April 12, 2021, for online bids, and April 15, 2021, for offline bids.

The scope of work for both tenders requires selected bidders to set up solar projects along with power evacuation cables up to the pooling station. They must also acquire all approvals, permits, and clearances required for setting up the project (including connectivity) from the state government and local bodies.

To be eligible to participate in the competitive bidding process for both tenders, the bidder’s net worth must not be less than ₹8 million (~$110,196)/MW of the quoted capacity. The successful bidders must enter into an ‘implementation and support’ agreement with the solar power developer.

Background: 

The 700 MW tender at Dholera was originally floated in January 2019, with the upper tariff ceiling of ₹2.75 (~$0.037)/kWh. In July 2020, GUVNL retendered 100 MW of capacity unallocated in its previous solar tender for 700 MW of solar projects to be set up at Raghanesda Solar Park. The tariff cap for the projects was ₹2.75 (~$0.0366)/kWh.

In August 2020, Vena Energy Renewables, Tata Power, ReNew Power, SJVN Limited, and TEQ Green Power (a subsidiary of O2 Power) won the auction for 700 MW of solar power floated by GUVNL for Dholera solar park (Phase IX).

In February, the Gujarat Electricity Regulatory Commission (GERC) allowed the GUVNL to cancel the 700 MW solar auction at Dholera Solar Park and retender it to discover a lower tariff for the projects. It also allowed GUVNL to retender its 100 MW solar auction for projects at Raghanesda for the same reason following a petition by SJVN Limited.

Developers were not happy with this move since the tender was scrapped over five months after the auction was concluded and letters of award were issued.

SJVN Limited, Tata Power, TEQ Green Power, and Vena Energy Renewables – the winners of the 700 MW auction – filed petitions with the Appellate Tribunal for Electricity (APTEL), seeking relief following GUVNL’s decision to reissue its 700 MW solar tender. The developers had given GUVNL the option to keep bids valid for one week until APTEL decided.

In response, the APTEL directed the GUVNL to extend the validity of bids placed by developers in its scrapped 700 MW solar auction by two weeks. It also directed the state distribution company (DISCOM) not to allocate the capacities awarded to the developers to third parties if it decided to float the 700 MW tender again.

A similar case in Andhra

This instance is similar to Andhra Pradesh where the 6.4 MW auction concluded by the Letter of Award (LoA) will be issued based on the outcome of the writ petition filed by Tata Power Renewable Energy on January 6, 2021, in the High Court of Andhra Pradesh, for stopping the further process of this 6.4 GW auction.

Addressing the petition, the High Court of Andhra Pradesh directed Andhra Pradesh Green Energy Corporation, the implementing agency to not enter into any agreements for its tender for 6.4 GW of solar power projects until further notice.

Later the High Court of Andhra Pradesh upheld Tata Power Renewable Energy’s contention that APGECL’s request for selection and power purchase agreement for 6.4 GW of solar projects for farmers in the state were in gross violation of the provisions of the law. The court, however, allowed the process of finalizing the bids to continue.

What next?

In the case of the reissued 700 MW tender, GUVNL was allowed to go ahead with the auction process but cannot issue a letter of award until the APTEL makes a decision. If it upholds the letter of award issued in the previous auction, then the results of the auction (reissued tender) will be null and void. But in case it allows the previous auction to be canceled which is going to be a historic decision, then the projects can be awarded to the winners in the auction (reissued tender). The industry will be keen to see the response to the bids when the developers are well aware of the uncertainty in the projects being awarded to the winners.

Mercom’s flagship event Mercom India Solar Summit, to be held virtually on April 8th and 9th, has an exclusive session to discuss ‘Tenders and Auctions – From Pipeline to PPAs, How We Get There.’ You can click here to register for the event.