The solar developers are losing their confidence as Uttar Pradesh is cancelling the winning bids without any valid reason other than the lure of lower tariffs.
Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) sent the letter of cancellation of bids to three winners of the reverse auction held in February 2020.
Media reports state that the three firms including Vijay Printing Press, NV Vogt Singapore and a consortium of Saudi Arabia-based Al Jomaih and India’s Jakson Power are planning to move the appellate tribunal for Electricity (APTEL) against the move. They may also appeal to Prime Minister for his intervention.
UP government expects the bids to be lower in the fresh auction. This might not be the case as per industry executives as the cost of solar equipment has increased with the rise of commodity price globally. The state government is confident of receiving lower tariff bids as the auction of May 2021 discovered a tariff of 2.69/unit.
In February 2020, Uttar Pradesh invited bids for 500 MW of solar power. Bids were received from four companies for setting up plants with a combined capacity of 184 MW.
SolarArise bid for 9 MW and I subsequently withdrew, Al Jomaih won 100 MW capacity, NV Vgot- 50 MW and Vijya Printing- 25 MW. The tariff of Rs 3.17 per unit was quoted in the auction of February 2020.
Earlier, Andhra Pradesh government had revised the power purchase agreements (PPAs) of solar and wind projects worth around 8,000 MW in the state. Gujarat also suspended the process of allocating solar capacity of 700 MW in February 2021, while it was obligated to signs PPAs with the winners of the auction.