Uttar Pradesh has recently cancelled winning bids for 184 megawatts (MW) of solar energy discovered through auctions in February 2020.
It is the latest state to rescind winning bids. The Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) in fact issued letters informing cancellation to NV Vogt Singapore Private Ltd, Al-Jomaih-Jakson Power Private Ltd, Vijay Printing Press Private Ltd and Talettutayi Solar Projects Eight saying their bids have become “time-barred and infructuous” since no action was taken by the firms after they consented for extension of the bid period validity till March 31, 2021.
According to these private solar companies the bid cancellation and re-negotiation attempts by states affects India’s image among foreign investors.
Taking it up, the National Solar Energy Federation of India (NSEFI), an umbrella organisation for solar energy stakeholders in India has written to the Union power minister RK Singh, pointing to the challenges being faced by solar developers in Uttar Pradesh, where secured bids were cancelled without any “valid reason”.
In a letter to the minister, NSEFI has stated that after any reverse auction process is completed, the onus is on the bidding agency, which in this case was UPNEDA to issue the LOIs to the winners in a time-bound manner as mentioned in the bidding guidelines. In this case, the body had to issue the Letters of Intent (LoI) before May 15, 2020, which it failed to do and instead requested the developers to extend the timelines for the bid period validity.
Since the solar developers were keen to implement the project so they accepted UPNEDA request to extend the bid period validity so as to allow the issue the LoIs, till June 30, 2021.
“It is very wrong on the part of UPNEDA to conclude that no action has been taken by our members for the bid period extension. There is no basis for UPNEDA’s statement that says our bids became time-barred and infructuous because we didn’t take any action, while all the way it was UPNEDA whose inaction led to this,” NSEFI said in its letter.
It said there has been an increasing trend among the states towards cancellation or re-negotiation of the bids, making it difficult for companies to execute projects in India.
“This uncertainty will not only hinder the foreign direct investment in the sector, but will also make foreign investors cautious towards all investments into the Power Sector which will affect India’s renewable energy journey and targets,” the letter said.