Gujarat: Developers shying away from solar auctions

AHMEDABAD: Auctions of solar power capacities in Gujarat continue to receive lukewarm response from renewable power project developers. Given the situation, Gujarat Urja Vikas Nigam Limited (GUVNL) could finalise bids for only 150 MW as against the tendered capacity of 950 MW.
In June, GUVNL had invited bids for 750 MW projects in Dholera Solar Park near Ahmedabad and 200 MW in Raghanesda park in Banaskantha district.Only two companies — Tata Renewable Energy Private Limited (TREPL) and Gujarat State Electricity Corporation Limited (GSECL) — evinced interest and were awarded contracts for the capacities they had bid for.
The financial bids were opened on August 16. Tata Renewable Energy has won a bid for developing 50 MW plant in Dholera Solar Park by quoting a tariff of Rs 2.75 per unit. State-owned GSECL bagged a project contract for 100 MW capacity to be developed in Raghanesda park at a tariff of Rs 2.65 per unit, said sources.
Industry players say the current uncertainty looming over the solar industry has dampened investor sentiments.
“The central government is planning to increase import duty on solar power equipment, which will increase project costs. There is already a safeguard duty on solar cells and modules imported to India. The tariffs to be quoted in solar auctions are also capped,” said an industry expert.
“Recently, Andhra Pradesh government decided to renegotiate power purchase agreements (PPAs) with solar and wind power developers. This too has added to the uncertainty and has negatively impacted the overall sentiment in the industry,” the expert added.
Earlier this year, the state-run company had invited bids for the entire 1,000 MW capacity in Dholera and 700 MW in Raghanesda. However, the company could then finalise bids only for 250 MW and 500 MW, respectively. GUVNL had again floated tenders in June for the capacities which could not be auctioned. However, the follow-up tenders for 750 MW (Dholera) and 200 MW (Raghanesda) have again failed to evoke desired response from the developers.