The solar tariffs discovered in the latest solar auction in Gujarat is from INR 2.65 to INR 2.70 per unit. This is the same auction that GUVNL had cancelled in January as the tariffs were too high. At that time the solar tariffs were between INR 2.84 to INR 2.89. As GUVNL has reduced the solar park charges which were 30 lakh per MW the solar tariffs in the latest auction has dropped. Further, there was no ceiling in that auction whereas in the latest auction the upper cap on the solar tariff was INR 2.70 per unit. On the downside, the auction remained under-subscribed. For the 700 MW, solar project GUVNL received a bid for 600 MW of which 500 MW was eligible.
Successful Bidders and their solar tariff
Electro Solaire Private Limited (Engie)– a French firm won most capacity at lowest solar tariff in this auction. Previously in the scrapped tender, the company had successfully won 250 MW of the 700 MW. It had quoted a tariff of INR 2.89 for the capacity.
Gujarat State Electricity Corporation Ltd and Gujarat Industries Power Company Ltd. won 100 MW at Rs 2.68 per unit. Tata Power Renewables won 100 MW at Rs 2.70 per unit. In September last year, Tata Power had unsuccessfully contested in the second phase of GUVNL 500 MWp at INR 2.89. The lowest tariff in the auction was INR 2.44 which is also the lowest for India.
Gujarat has previously cancelled and retendered the projects in order to achieve low solar energy tariffs in the auction. Companies on their part are willing to take that risk in order to build their portfolio in India but the companies are earning less return on the capital. Solardae’s financial analysis indicates that the ROCE for these projects is around 5% whereas the Internal Rate of Return (IRR) is nearly 9% at these tariffs.
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