The Gujarat Urja Vikas Nigam Limited (GUVNL) tendered 500 MW of solar to be installed across the state of Gujarat. The bid-submission deadline is July 10, 2017.

GUVNL has regulated, out of the tendered (500 MW) capacity, 425 MW is open for all and 75 MW can be allotted to central PSUs, state PSUs, and government-controlled organizations that are willing to execute power purchase agreements (PPAs) with GUVNL at the lowest tariff discovered.

They will have to sign PPAs with GUVNL at the lowest (L1) rate within a period of one month from conclusion of the reverse auction and such allocation will be made on first come first served basis.

The bidders will be free to utilize financial incentives like accelerated depreciation, concessional customs and excise duties, tax holidays, and benefits from trading of carbon credits, as available for such projects.

The minimum project size will be 25 MW for bidders other than central and state PSU’s. The GUVNL has also regulated that projects should be designed for delivery of energy at Gujarat Energy Transmission Corporation (GETCO) periphery.

The successful bidder will need to set up solar PV power projects, including the transmission network up to the delivery point, at their own cost (including but not limited to open access charges to the delivery point).

The PPA will be signed within one month from the date of issue of Letter of Award (LoA) and the PPA will be executed between GUVNL and selected bidders for a period of 25 years from the date of commercial operations. The successful developers will have to secure financing arrangements within nine months of the date of issue of LoA.

The GUVNL has set a maximum delay of six months in project commissioning from the scheduled due date, after which the GUVNL will encash performance bank guarantees on a daily basis proportionate to the capacity not commissioned.

The General Manager (IPP) from GUVNL, told Mercom, “We have not yet fixed an upper ceiling for this tender, but the current Gujarat Electricity Regulatory Commission (GERC) feed-in tariff for solar will be the upper ceiling for this tender.”

“The rates for solar have fallen in India and we expect the tariffs quoted to be in the range of Rs.2.50 (~$0.039)/kWh. We at GUVNL feel this is the right time for a tender to address future RPO obligations. Gujarat has been solar RPO surplus state,” added the GM (IPP).

Gujarat tendered 150 MW of large-scale solar projects at the Charanka Solar Park in May. According to Mercom’s Q1 India Quarterly Update, Gujarat had 1,142 MW of solar projects in operations and 260 MW of solar projects under development as of Q1 2017.

In the latest “Integrated Rating for State Power Distribution Utilities” report by the Ministry of Power, the Gujarat state power distribution utilities (DISCOMs) were rated at the top with A+ ratings. This auction is likely to be extremely competitive and we could see record low tariffs considering the PPAs will be signed with creditworthy off-takers with a good record of paying on time.

Image credit: By Citizenmj (Own work) [CC BY-SA 3.0, via Wikimedia Commons