Gujarat Urja Vikas Nigam Limited (GUVNL)’s recent 500 MW grid-connected solar photovoltaic (PV) tender with greenshoe option has been oversubscribed by over three times.

The General Manager at GUVNL told Mercom, “We have received total technical bids for 1,590 MW and the financial bidding will begin on March 28, 2018.”

GUVNL had announced the tender in February 2018 to fulfill its Renewable Purchase Obligation (RPO) and to meet the future requirements of distribution companies (DISCOMs) in the state. The bid-submission deadline was March 19, 2018.

Gujarat has installed approximately 1.4 GW of solar as of January 2018, according to Mercom India Project tracker. Solar installations in 2017 totaled just 282 MW. Gujarat’s solar RPO is set at 4.25 percent for 2018-19.

“Most of Gujarat’s solar installations happened in 2012 through the feed-in tariff program when Prime Minister Modi was the Chief Minister of the state. Due to power surplus situation and expensive feed-in tariff payments, Gujarat has been reluctant to add more solar even though it is blessed with high levels of solar insolation,” said Raj Prabhu, CEO of Mercom Capital Group.

When asked whether the GUVNL auction was affected by the prevailing uncertainties in the solar sector, the official said, “Our tender has been subscribed three times over.”

In this tender, GUVNL had also given the project developers greenshoe (additional capacity can be awarded based on the L1 tariff of this tender) option to develop an extra 500 MW of solar power projects at the Lowest Quoted Tariff (L1).

Towards the end of February 2018, more than 2 GW of planned solar tenders were postponed across three Indian states as the bidders were deterred by the ongoing uncertainty around proposed duties on critical project components, which made it difficult to forecast project costs and viable bids. Most of these tenders had an upper tariff ceiling.

The GUVNL had not specified any upper tariff ceiling for this tender and this might have led to a greater number of participating bidders.

“More than 10 bidders participated in the technical round,” the GUVNL official told Mercom.

Based on data from Mercom India Tender Tracker, over 12 GW of solar has been tendered so far this year.

Gujarat tenders are sought after because of their positive financial position and good payment history. Four Gujarat state power distribution utilities had the best ratings of A+ according to the “Integrated Rating for State Power Distribution Utilities” report.

Image: MMEPL Solar