Gujarat’s 1 GW solar tender shunned by developers

A 1 GW solar auction in Gujarat has been postponed until March 19 after it attracted no bids because developers felt a ceiling tariff imposed by the state was too low.

The auction, which related to projects to be developed at the Dholera Solar Park, stipulated a maximum Rs2.75/kWh would be paid for electricity generated by the plants.

“We heard from various bidders yesterday that they did not want to participate at the moment,” an executive from Gujarat Urja Vikas Nigam Ltd (GUVNL) reportedly told the Economic Times newspaper and website.

One anonymous developer quoted by the newspaper said: “The ceiling tariff is unrealistic because of the quality of the site. It is not plain land, the terrain is problematic, the construction cost there will be higher.”

Unrepentant

However, the GUVNL official quoted by the Times was insistent there would be no change to pricing, saying: “We will not increase the ceiling tariff.”

The latest postponement will come as a setback for the Gujarat state government’s plans to add 3 GW of clean energy capacity annually over the next three years, including 2 GW of solar capacity.

Although a 500 MW auction held in the state in February served up tariffs of Rs2.55-2.68/kWh, GUVNL had previously annulled auctions which resulted in solar electricity prices of more than Rs2.8/kWh.

The result of a 700 MW auction in December was cancelled, with GUVNL blaming high tariffs ranging from Rs2.84-2.89. The foreign developers who posted the lowest bids in that procurement exercise blamed high charges at the Raghanesda Solar Park, where the projects had to be based.

Last March, GUVNL cancelled a 500 MW auction as the lowest tariff it attracted was Rs2.98.