To scout for a lower solar power tariff that is reaching a value of as low as Rs1.99/unit, the Gujarat government is in the process to call for another auction for a 700MW solar power plant which shall be putting up at Dholera.

This project was auctioned previously in august,2020 where the under most tariff was Rs2.78/unit. The winners of this auction were Vena energy, Tata Power, Renew Power, state-run Satluj Jal Vidyut Nigam, and TEQ Green. The Letters of Award (LoAs) were already handed over to them in October 2020. The final power purchase agreements were scheduled to be signed in January but were not clinched. Although, the LoAs are yet not cancelled the state government in the picture has taken regulatory clearance to proceed with another round of bidding.

This 700MW solar project is going to be a smash-hit because the project developers have already paid near about Rs 97crore upfront as the cost of land and are willing to pay maintenance and operation cost of near about Rs 28 crore per year which might be escalating at 5% per annum. The industry champions see the step taken as the perpetuation of the policy uncertainty regarding solar, which is snowballing into a major impediment towards achieving the target of having 1,75,000 MW of renewable power capacity by 2022.

The Gujarat state electricity regulatory commission has approved state power utility Gujarat Urja Vikas Nigam Ltd (GUVNL) to proceed with the re-tendering process, as it is for the public and common good. The GUVNL also states that after the LoAs were issued, “it has been revealed that the capital cost and other expenses for solar projects may have significantly reduced and resulted in much reduced solar power quoted tariff in a competitive bid process”.

The tariffs for the solar project have also fallen down for an auction of 500MW that was held by GUVNL itself previously in 2020 in the month of December. The ministry of power generation is willing to develop dholera as a highly developed region and wishes to contribute to the huge development of Dholera solar where installation of 5000MW approximately is possible. 

Source:- GUVNL