Gujarat Tenders for 2,700 MW Renewable Energy Goes Under Subscribed

Gujarat’s move to auction renewable power projects totaling 2,700 MW has failed to evoke the desired response from bidders. All the three tenders — floated by the Gujarat Urja Vikas Nigam Limited (GUVNL) from January to March — have been under-subscribed.

The tender for 1,000 MW solar power capacity to be built at Dholera Solar Park is under-subscribed by 700MW as only two companies have placed bids for just 300 MW. Despite the extension of submission deadline four times, this tender could not attract more bidders, said people aware of the development.

The response is slightly better in the case of another tender for 700 MW capacity to be developed at Raghanesda Solar Park in Banaskantha district. As against the tendered capacity, bids for 600 MW have been received by the GUVNL.

This is the second attempt to auction the 700MW capacity at Raghanesda park. The GUVNL had originally invited bids for this park last September and completed the auction in December 2018. The state power utility, however, cancelled the bidding on the grounds that the lowest tariff of Rs 2.84 per unit discovered in the auction was too high. The first attempt had seen good response with bids totalling 1,250MW.

Maximum or ceiling tariffs fixed for bidders and location of these parks are the two major reasons for the poor response. The GUVNL kept ceiling tariff of Rs 2.70 per unit for Raghanesda tender and Rs 2.75 per unit for Dholera. Any bids above the maximum tariffs are considered non-responsive.

The GUVNL had previously cancelled a couple of auctions even after the finalization of successful bidders. The safeguard duty on solar cells and modules imported from China and Malaysia as well as the higher GST on solar projects have also raised the cost for solar project developers.

The GUVNL’s tender for 1,000MW wind power capacity also remained under-subscribed as it has attracted bids to the tune of 931.4MW. Eight wind power companies have submitted their bids. The reverse auction for all the three tenders will be conducted next week.