Gujarat awards only 190MW capacity for a 1GW tender

In its latest tender, Gujarat authorities asked successful bidders to match the lowest bid for contract signing in order to lower wind costs. The response was muted.

by Suuhas Tenddukar 12 August 2019

Gujarat's authorities wanted bidders to match the low-end prices in the latest state tender (pic: Sembcorp Industries)

Gujarat’s 1GW tender received bids for 932.4MW with the lowest bid of INR 2,800/MWh ($39.9/MWh) from Anisha Power Projects for 40MW of capacity.

The second lowest bids were was INR 2,810/MWh ($40.1/MWh) from Powerica and Vena Energy for 51.6MW and 100MW, respectively.

The other bids were Sarjan Realities at INR 2,870/MWh ($40.9/MWh) for 100.8MW followed by INR 2,950/MWh ($42.1/MWh) each by Viridi Clean Alternatives (100MW), Inox Wind (40MW), ReNew Power (200MW) and Adani Green Energy (300MW).

The lowest bid is 15% above over the record-low INR 2,440/MWh ($34.53/MWh) tariff discovered in the first state auction in December 2017, but the increase reflected a more cautious approach from participants.

However, taking note of the spread between the bids (INR 2,800-2,950/MWh) state utility Gujarat Urja Vikas Nigam Limited (GUVNL), asked developers to match the low rate of INR 2,800/MWh to proceed with the contracts.

"The gap is huge. We cannot issue the letter of award (LOA) at INR 2,800/MWh to one winner and INR 2,950/MWh to another. But instead of rejecting, we are giving them an option," a GUVNL official said.

In response to this development, Vena Energy and Powerica who had bid INR 2,810/MWh ($40.1/MWh) agreed to match the lowest price as the difference was very small.

Speaking to local media , an official from Vena Energy said "We had been awarded 100 MW in this project. The [lowest] tariff is feasible with achievable return on investment."

However, for other bidders, the gap was quite high and they opted out leaving just 190MW secured in the latest round.