Another Solar Auction Cancelled In India

• GUVNL has scrapped a solar power auction that saw 3 foreign players winning all 700 MW tendered
• High tariffs are the reason the agency is cancelled the auction retroactively
• High solar park charges is what led to the higher tariffs, according to GUVNL
• GUVNL may reissue the tender after revising solar park charges, according to Mercom

The state of Gujarat has cancelled a solar auction for 700 MW capacity because of high winning tariffs. Indian business daily The Economic Times (ET) reported the government has conveyed the decision to winning developers.

In December 2018, Gujarat Urja Vikas Nigam Limited (GUVNL) auctioned 700 MW with SB Energy quoting the lowest tariff of INR 2.84 ($0.046) per kWh for 250 MW. The other 2 winners, Fortum and Engie's Electro Solaire, each quoted INR 2.89 ($0.0413) per kWh to stake claims to 250 MW and 200 MW, respectively (see SB Energy Offers Lowest Bid For Gujarat Tender).

Mercom India Research too said that developers confirmed cancellation of the auction due to high tariffs that shot up because of high solar park charges, something the developer community is not too happy about it as it blames a lack of due diligence on the part of GUVNL before issuing the tender. Other feel that the absence of Indian players among the winners could be the reason behind cancellation.

GUVNL is likely to revise the park charges and retender the capacity, according to Mercom.

This is the second solar auction the agency has cancelled. In April 2018, it scrapped a 500 MW solar auction due to high tariffs with the lowest bid of INR 2.98 ($0.0456) per kWh, and managed to bring down the lowest bid to INR 2.44 ($0.0338) per kWh in a new tender (see 500 MW Gujarat Auction Achieves INR 2.44/kWh Bid).