Foreign Players Win Big in Gujarat Solar Park Auction

The previous auction conducted by Gujarat Urja Vikas Nigam in September for 500 MW saw a winning tariff of Rs 2.44 per unit.

International solar developers have stood out and won the entire 700 MW capacity of the solar auction conducted by the Gujarat Urja Vikas Nigam Ltd (GUVNL).

SB Energy which is backed by Softbank won 250 MW at the lowest tariff of Rs 2.84 per unit. French major Engie got 200 MW bidding a price of Rs 2.89 per unit. 250 MW was bagged by Finnish developer Fortum which had also quoted Rs 2.89 per unit.

The previous auction conducted by Gujarat Urja Vikas Nigam in September for 500 MW saw a winning tariff of Rs 2.44 per unit.

The increase of tariff of 40 paise in this auction from the last one has been appreciated by developers and industry analysts. The practice of quoting unrealistically low tariff to win auctions was not very welcomed in the industry.

“That the tariff has gone up is an encouraging sign,” a developer said. “It means that sanity has returned into the market. People are now pricing in the higher cost of capital, and the volatility of the currency,” the person said on condition of anonymity.

Panels and modules which are used in India are mostly imported from China and Malaysia which attracts a safeguard duty of 25%.

Solar park charges which increase the overall coast of operations is another reason why this auction saw an increased tariff. Vinay Rustagi, managing director at solar consultancy Bridge To India said, “The tariff is 40 paise higher because of solar park charges.”

Source: ET Energy World