The Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) has cancelled the recent auction for the development of 1 GW of grid-connected solar photovoltaic (PV) projects across the state.

When contacted to confirm the development, a UPNEDA official told Mercom, “Yes, we have cancelled it because of the complaint of higher tariff. So, we have brought it down from 1,000 MW to 500 MW. We will tender the remaining 500 MW after the price realization in the first 500 MW”.

In the auction, ₹3.48 (~$0.050)/kWh tariff had emerged as the lowest (L1) quoted by the developers.

Previously, an industry source of Mercom had said, “The UPNEDA officials had taken into consideration land availability issues, project sizes, low CUF and thought ₹3.10 ($0.045)/kWh to ₹3.15 ($0.046)/kWh would be a good tariff as the developers were being provided free transmission, but the L1 tariff of ₹3.48 (~$0.050)/kWh is way more than their expectations.”

UPNEDA had issued an amended request for procurement (RfP) to develop 1 GW of solar projects in April 2018. Initially, the 1 GW capacity was tendered by the UPNEDA in January 2018. Later, UPNEDA approached the Uttar Pradesh Electricity Regulatory Commission (UPERC) for certain modifications to the competitive bidding guidelines issued by Ministry of New and Renewable Energy (MNRE) for solar PV projects.

In this global tender, responding to the demand from developers, UPNEDA had also allowed developers to present multiple bids. This was done keeping in mind the request that the bids will be based on the location of the project. During the pre-bid meeting, the developers had said that tariffs should be based on the location and they would not be able to quote the same tariffs for all locations.

Then in the beginning of April 2018, UPERC approved the RfP and PPA for 1 GW of grid-connected solar PV projects put forth by UPNEDA.

The 1 GW grid-connected solar tender issued by UPNEDA was also oversubscribed by 870 MW, which indicated the huge interest it had garnered among the project developers.

Recently, the National Solar Energy Federation of India (NSEFI) had written to the energy minister of Uttar Pradesh to honor the tariffs discovered in the recently concluded 1,000 MW solar auction conducted by UPNEDA.

In the letter, NSEFI had expressed apprehension that the government of Uttar Pradesh may not honor the bidding process due to comparisons of tariff discovered in the 1 GW auction with other auctions conducted across India.

According to Mercom’s India Solar Tender Tracker, the state of Uttar Pradesh has an installed solar capacity of approximately 775 MW and a project pipeline of approximately 272.5 MW.

In April 2018, Gujarat Urja Vikas Nigam Limited (GUVNL) also scrapped its auction for the development of  500 MW of grid-connected solar photovoltaic (PV) projects in the state citing high tariffs.

Image credit: Greenko