Solar tariffs increase in Gujarat auction

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BENGALURU: Solar tariffs increased to Rs 2.61 per unit compared with Rs 2.50 per unit in the last auction conducted in February. 

Vena Energy, Juniper Energy and Tata Power won 40MW, 190MW and 120MW at tariffs of Rs 2.61, Rs 2.63 and Rs 2.64 per unit, respectively in an auction conducted by Gujarat’s main distribution company, Gujarat Urja VikasLimited (GUVNL) on Wednesday for 350MW of solar capacity. 

A GUVNL executive told ET last week that although the size of the tender is 500MW, only 430MW of bids were received, forcing the discom to scale down allotment. “We were expecting to get at least 700-800MW, but somehow people have not participated,” said the executive, who spoke on the condition of anonymity. 

In a solar auction conducted by the renewable energy ministry’s nodal agency Solar Energy Corporation of India (SECI) last month, the lowest winning tariff was Rs 2.50 per unit. 

“As far as international investors go, the risk assessment is lower for central tenders. So they are able to finance the capital at a lesser rate,” said Jyoti Gulia, founder of renewable energy consultancy firm, JMK Research

The ceiling tariff for this auction was set at Rs 2.65 per unit. Industry executives told ET that it is too competitive, especially given that the practice of setting a ceiling tariff is being done away with. 

The ministry of new and renewable energy has directed all state discoms and central agencies not to prescribe an upper ceiling tariff in future wind and solar auctions. 

GUVNL had conducted a 500MW solar auction in May 2019 where tariffs ranged between Rs 2.65-2.70 per unit. 

Source: Economic Times