GUVNL cancels its 500 MW solar power auction

Gujarat Urja Vikas Nigam Limited (GUVNL) has cancelled its recent solar power auction for the development of 500 MW of capacity in the state. The capacity had been tendered in February 2018 by GUVNL to fulfil its RPO.

As per GUVNL, the lowest tariff of Rs 2.98 per kWh, quoted by Kalthia Engineering and Construction to develop 50 MW of capacity, was much higher than that discovered in GUVNL’s earlier solar auction of the same capacity. In the auction held in September, 2017 a tariff of 2.65 per kWh had been quoted by GRT Jewellers India Private Limited, for the development of 90 MW of capacity. This tariff is Rs 0.33 per kWh lower than the recently discovered tariff of Rs 2.98 per kWh.

The higher tariffs could be attributed to the uncertainties in the solar sector caused by a levy of the safeguard duty. The developers had reportedly factored this into their bids, thereby increasing the tariffs for the auction. As a result individual project capacities were not awarded and the tariffs were under review by GUVNL’s board of directors. After the cancelation of the auction, the performance bank guarantees submitted by the bidders were returned by GUVNL.