After 1.99/kWh, Gujarat Cancels Results of two Earlier Solar Auctions

GUVNL has cancelled the results of auctions held for 800 MW solar projects in Gujarat after receiving permission to re-tender the projects.

According to local reports, the Gujarat Urja Vikas Nigam Ltd (GUVNL) has cancelled the results of auctions held for the award of 700 MW Dholera solar park and the 100 MW Raghanesda solar park in the state. The Discom has received permission from the state power regulator Gujarat Electricity Regulatory Commission (GERC) to hold the auctions again. 

In the auction conducted for the 700 MW projects in August 2020, GUVNL had awarded the capacity to five bidders. With Tata Power and Vena Energy submitting the winning bids (Lowest Bids – L1) for 100 MW capacity each of Rs 2.78/kWh. Followed by ReNew Power which secured 200 MW project capacity with its bid of Rs 2.79/kWh. SJVN Limited came in with the L3 bid of Rs 2.80/kWh and secured 100 MW capacity while TEQ Power secured the remaining 200 MW capacity with its bid of Rs 2.81/kWh.

In September, SJVN  had announced that it had bagged a 100 MW solar PV power project in the Raghanesda Solar Park in Gujarat. The firm had participated in an open bidding process for allotment of Raghanesda Solar Park, Gujarat and bagged the quoted capacity of 100 MW at the rate of Rs 2.73/unit on a build own and operate (BOO) basis.

In December 2020, the state set a new benchmark when the latest round of auctions conducted by GUVNL, for 500 MW worth of solar projects in the state, set a new record for the lowest solar tariff in India. With L1 tariffs reaching Rs 1.99/kWh, the auction beat the recently set record of Rs 2/kWh which was set in November.

Citing the difference in the new record low tariffs, and the tariffs obtained in the other auctions. The state regulator stated in its order for re-tendering the 100 MW capacity in the Raghanesda Solar Park that “in light of the latest price trends, wherein discovered tariff is at Rs 1.99 per unit in (the) non-park based tender … the financial implication of higher tariff of Rs 2.65 per unit offered for 100 MW capacity for a period of 25 years would be substantial.”

The commission also cited a similar reason for allowing re-tendering in the 700 MW Dholera auction.

It is believed that GUVNL had asked for SJVN  to reconsider its Raghanesda park tariff given the result of the December auction. To which SJVN had agreed to lower it to Rs 2.65 per unit, but no further. After which the commission ordered the re-tendering.

This isn’t the first such case in the state where previously in January 2019, the state had announced that it had cancelled the solar auction it had held in December 2018 for the development of 700 MW of solar projects, citing winning bids being too high as the reason for cancellation. The entire tender capacity was won by foreign investors, with Softbank-backed SB Energy getting 250 MW at Rs 2.84/kWh, and Finland’s Fortum and France’s Engie getting 250 MW and 200 MW respectively at a quoted tariff of Rs 2.89/kWh.

Prior to this, the state had cancelled its 500 MW auction held in March 2018, with the winning bid at Rs 2.98/kWh.