Tepid response to auction for solar projects in Gujarat

NEW DELHI: Winning bids for solar projects in Gujarat remained stuck at Rs 4.43 per unit, the reserve price set for most of the recent auctions in India, suggesting that prices may have bottomed out. The contracts were awarded on the basis of the least subsidy sought.

The auction conducted by the Solar Energy Corporation of India for 160 MW of projects at the Charanka Solar Park in Gujarat (four projects of 40 MW each), was won by state-owned Gujarat Industries Power Co, which got 80 MW, Mahindra Renewables, which got 40 MW, and Orange Renewables.

With all bids quoting the same tariff, the winners were decided on the basis of the least subsidy or viability gap funding. The Ministry of New and Renewable Energy provides VGF up to Rs 1 crore per MW to solar developers.

Gujarat Industries sought VGF of Rs 67.99 lakh per MW for one project and Rs 69.75 lakh per MW for the other. Orange Renewables sought Rs 70.25 lakh per MW and Mahindra Rs 77.77 lakh per MW, a top official of SECI said. In four solar auctions held by SECI this year in Maharashtra, Uttar Pradesh, Andhra Pradesh and Chhattisgarh, the tariffs quoted did not drop below below the reserve price of Rs 4.43 per unit.

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