Despite four extensions to the bidding deadline, the 1 GW Gujarat solar tender has yet again failed to attract developers, as it prompted only two bids for a total 300 MW of capacity, according to daily newspaper and website The Economic Times.
The auction, which concerned capacity at the Dholera Solar Park, stipulated a maximum Rs2.75/kWh would be paid for electricity generated by the plants procured.
Earlier this month, another Gujarat solar tender – for the Raghanesda Solar Park – was undersubscribed, attracting bids for 600 MW of the 700 MW of generation capacity on offer. That tender, floated by state utility Gujarat Urja Vikas Nigam Limited (GUVNL), was the second attempt to attract PV developers to Phase III of the Raghanesda park. The initial procurement, in September, prompted bids for 1.25 GW of capacity but was cancelled by the utility in January after it decided the lowest 700 MW worth of bids were too high, at Rs2.84-2.89.
GUVNL re-tendered the capacity in March with a Rs30 lakh/MW reduction in solar park charges as an incentive but the addition of a maximum tariff of Rs2.7 per kWh deterred bidders.
Deterrents
Low ceiling prices and the location of solar parks are recurring problems for Indian solar procurement, according to The Economic Times, which quoted an industry source who said: “The ceiling tariff is very low which is not feasible for developers. Also, the location of these parks would further raise the project costs to the developer.”
pv magazine reported on a study published by Fitch Solutions Macro Research, a unit of Fitch Group, which stated: “[The] 25% safeguarding duty applied to solar cells and modules from China and Malaysia, GST uncertainty and land availability and acquisition issues have weighed on investor confidence.” As a result, added the report, “developers are stalling projects to bypass the two-year tariff on east Asian products”.
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