Amongst the bidders for 250 megawatt (MW) solar power auction, Tata Power Renewable Energy emerges as a winner. On 22nd May 2019, an auction was held in Gujarat by the Gujarat Urja Vikas Nigam Limited (GUVNL). This was to allocate 1000 MW capacity to be built at Dholera Solar Park, Gujarat.
The auction was conducted thrice, but it could only attract two buyers, Tata Power Renewable Energy and Gujarat Industries Power Company Limited(GIPCL). However, bidders refused to agree to the terms. Tata Power Renewable Energy is a subsidiary of Tata Power Company limited, whereas GIPCL is a Gujarat state-owned company. GIPCL bid only for 50 MW of the capacity. While Tata Power Renewable Energy bid for 250 MW at Rs. 2.75 per unit. The winner was chosen through the drawing of slots, as GUVNL will carry out the dispensation of only 250 MW.
Reasons for non-subscription
The auction had to be carried out three times because the developers or GENCOs were disagreeing with the ceiling tariff. GENCOs are the generating companies or power plants in the power industry, for eg. Tata Power or Reliance Power. The cost of construction is expected to be higher in that particular territory in Gujarat.
In addition to that GUVNL had set the ceiling price to Rs. 2.75 per unit. The developers thought the ceiling price was too low. This led to the buyers stepping back from the bid. The low response is also because the GENCOs are averse to the auctions organized over Gujarat territories after January 2019. The reason being, the auction results of Raghanesda Solar Park, Gujarat were cancelled. The cancellation was due to the winning quotes being too high and not feasible according to GUVNL.
Bidding for tenders
Unlike the regular auctions, the bidding structure of the tenders is different. In the normal bidding process, the highest bid or bidder wins the auction, whereas in tendering the lowest bid is allocated with the tender. It is also called as reverse bidding. There is a ceiling price beyond which one cannot bid and the bidding starts from that price. There are ranks given to the bidders like L1, L2, L3, and so on. The L1 rank is the lowest bidder of all and at the end of the process gets the tender.
Raghanesda Solar Park and Dholera Solar Park.
Solar Park is a photovoltaic system through which power is supplied to the power grid. The second attempt for the auction of Raghanesda Solar Park was lower than the last resulting bid tariffs. L1 bid was of Rs. 2.65/kWh for 500 MW solar capacity to Electro Solaire Pvt. Ltd. The second attempt at auction resulted in non-subscription. Only 600 MW was allotted for a 700 MW capacity.
Dholera Solar Park has a total capacity of 5000 MW. It is proposed to be auctioned in two phases. In the first phase, the capacity of 1000 MW will be developed. Further, the tender for the same will be auctioned to the GENCOs. Further, in the second phase plots with a capacity of 4000 MW will be developed. Only 250 MW is allocated to Tata Power Renewable Energy out of the 1000MW capacity.