High Solar Tariffs Sees Gujarat Cancel 700 MW Solar Tender

The Gujarat government is likely to reduce the charges at the solar park, after which GUVNL will hold a fresh auction.

The Gujarat government has cancelled the solar auction it held in December for the development of 700 MW of solar projects, citing winning bids being too high as the reason for cancellation.

The decision was conveyed to the winning developers at a meeting held this week, attended by Gujarat’s Additional Chief Secretary, Energy, Raj Gopal, and officials of the Gujarat Urja Vikas Nigam Ltd (GUVNL), the agency which conducted the auction. 

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.

The previous auction for 500 MW held by GUVNL in September 2018 had seen the lowest tariff at Rs 2.44/kWh.

Solar Power Developers have attributed the rise mainly to the high charges levied at the Raghanesda Solar Park in the state, where the projects have to be located, unlike the ones won in September, which could be put up anywhere in the state.

The Gujarat government is likely to reduce the charges at the solar park, after which GUVNL will hold a fresh auction.

This is the second auction the state has canceLled citing high tariffs. Earlier, GUVNL had cancelled its 500 MW auction held in March last year, with the winning bid at Rs 2.98/kWh.