The Ministry of New and Renewable Energy (MoNRE) had notified the media that a basic customs duty (BCD) on solar imports up to 40% is set to be levied from 1 April 2022. With the new order, there is an expectation that project costs will shoot up.

However, in January 2021, the Gujarat Urja Vikas Nigam Limited (GUVNL) had floated a request for selection to purchase power from 500 MW of grid-connected solar photovoltaic (PV) projects to be set up in the state in phase-12.

The tender had received a good response and was oversubscribed. Despite being the first auction after the BCD announcement, there was no significant increase in the quoted tariffs.

NTPC Renewable Energy, Sprng Ujjvala Energy, Coal India Ltd, and TP Saurya, a Tata Power subsidiary, were declared winners in the auction to purchase power from 500 MW grid-connected solar projects.

Sprng Ujjvala Energy won a capacity of 120 MW quoting Rs 2.20 per kWh. NTPC Renewable Energy, Coal India, and TP Saurya won 150 MW, 100 MW, and 60 MW, respectively, quoting Rs 2.20 per kWh. SJVN had quoted Rs 2.21 per kWh for 100 MW but won 70 MW capacity under the bucket filling method.

Since this was the first auction after the announcement of BCD, bidders were forewarned to take the duty into account while quoting tariffs in all future bids where the last date of bid submission fell after the notification dated 9 March 2021.

The lowest quoted tariff was up just 11% compared to GUVNL’s previous auction for 500 MW of solar projects, which set a new record for the lowest tariff with Rs 1.99 per kWh in the auction.

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