A recent tender issued by the state government of Gujarat to set up 700 megawatts of solar power capacity garnered bids from Indian and foreign project developers, with the international companies prevailing in the end.
SB Energy, a SoftBank-led project developer, Finland-based Fortum Solar, and French utility Engie secured the rights to develop 700 megawatts of capacity at Gujarat’s Raghanesda Solar Park, located in Banaskantha district. Three major Indian developers had showed interest in the tender but failed to make the cut in the financial bid.
The tender was floated by the Gujarat government in October 2018, and saw total bids of 1,750 megawatts against the offered capacity of just 700 megawatts. Indian developers that had placed initial bids include Tata Power, Adani Green Energy, and Mahinda Susten.
In the financial bid round, SB Energy secured 250 megawatts of capacity at the lowest bid of Rs 2.84/kWh (4.08¢/kWh). Fortum Solar and Engie both placed bids of Rs 2.89/kWh (4.15¢/kWh), but while Fortum secured 250 megawatts, Engie managed to bag just 200 megawatts.
Interestingly, this is the first time ever that SB Energy has participated in a solar power auction organized by a state government. The company used to participate only in tenders issued by the Solar Energy Corporation of India, or NTPC Limited, or any other company or agency directly under the control of the central government.
The short in strategy by SB Energy may be the result of a long lull in tenders from any central government agency. SB Energy had secured a record 1.1 gigawatts in a tender issued by Solar Energy Corporation of India (SECI) where a total of 3 gigawatts capacity was offered. SECI, however, annulled 2.4 gigawatts of the initially allocated 3 gigawatts capacity. The Ministry of New and Renewable Energy (MNRE) claimed that the tariff bids quoted by all but one developers were too high, and were indicative of cartelization.
The Raghanesda Solar Park is one of the three solar power parks that are either already operational or planned in Gujarat. The west Indian state hosts the Charanka solar power park, the first multi-developer solar park in the world, and will soon auction capacity at the Dholera solar power park, with a planned capacity of 5 gigawatts.