industry

Gujarat tells wind auction winners to match lowest tariff


BENGALURU: Gujarat has told all winners of its latest auction of wind power projects to match the tariff of Rs 2.80 per unit quoted by lowest bidder Enerfra to stand a chance to win the contracts, people familiar with the development told ET.

There were nine winners who quoted tariffs in the range of Rs 2.80-2.95 per unit in the 1000-mw auction conducted by Gujarat Urja Vikas Nigam (GUVNL) in May.

“In the lowest tariff and the highest tariff quoted by successful bidders, GUVNL intends to issue LOA (letter of award) only to those successful bidders who are willing to match their rate to their L1 rate of Rs 2.80 per unit,” the state-owned electrical services company said in a letter to one of the winners.

It asked the company to give consent for matching the lowest rate “within seven days from issue of letter to enable GUVNL to take suitable decision for necessary action”, a company executive told ET, quoting the letter.

Among the winners at the auction were France’s EDF, Renew Power, Powerica, Adani and Inox Wind.

A GUVNL executive confirmed the development.

“The gap is huge,” the person said. “We cannot issue the LOA at 2.80 to one winner and 2.90 to another. That is under GUVNL’s right to issue the LOA. But instead of rejecting, we are giving them an option.”

The executive also said the issue of LOA is not guaranteed. “We have not said that we are willing to issue the LOA. We are only trying to find out and then we will take the final call,” the person said.

In the tender document GUVNL had said it “shall reserve the right to short close the capacity lower than 1,000 mw at its discretion if the prices are abruptly high”.

At the auction, Enerfra had won 40 mw of capacity at Rs 2.80 per unit, while Powerica and Vena Energy won 50 mw and 100 mw, respectively, at Rs 2.81 per unit. EDF, Renew Power, Adani and Inox Wind had quoted tariffs of Rs 2.87-2.95 per unit in their winning bid.

Gujarat has quickly lost its status as a favourite destination of wind energy developers although wind speeds are high in the state. That is because over the past several months the state has gone slow on leasing land to projects auctioned by central agencies.

The state discom had recently cancelled the results of a 700-mw solar auction it held in December on the grounds that the winning tariffs were too high. Later a re-auction was conducted in May. In March last year it cancelled a 500-mw solar auction where the lowest price reached was Rs 2.98 per unit.





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