GUVNL First Off The Block With 2 GW/4GWh BESS Tender Under New VGF Regime

Gujarat Urja Vikas Nigam Ltd. (GUVNL)has released the largest tender seen so far under the new VGF (Viability gap funding) regime. With a lower VGF of Rs 18 lacs /MW as compared to the previous regime, the tender is nevertheless expected to generate a strong response.  The  2 GW/ 4 GWh (Ph - 7)  standalone BESS tender comes with a tenor of 12 years, to be set up under the BOO (Build, Own, Operate) model. The discom has identified 12 substations of the state transmission network that can be considered for connecting to the BESS projects under the tender. With this, the project will obviously need to be set up in Gujarat itself, possibly reducing options for some bidders. It also seems to have increased the odds of a solar-driven approach for the whole capacity for many bidders.  

Tender Financials and Bidding Requirements

The tender offers a VGF of INR 18 lacs/MWh (20% on FC, 50% on commissioning, and 30% after 1st year after COD), with a desired financial closure within 9 months of signing the BESPA. Bidders are expected to quote tariffs on a MW/month basis, and achieve commissioning with 18 months of financial closure. 

With a minimum bid size of 50 MW/ 100 MWh, the tender mandates availability of 95% on an annual basis, with round-trip efficiency of 85% on a monthly basis. The BESS should be able to charge and discharge with a C rate of 0.5.

The annual degradation tolerance is up to 2.5%, with any shortfalls to see a penalty of twice the tariff agreed.  18 months + 9 months with LD19. Winning bidders' range has been set at L1+ 2%.

EMD has been set at Rs 500,000 per MW, while Performance Bank Guarantee for the winning bidders is at Rs 12,50,000/MW.

Winners will be identified through the regular e-bidding followed by e-Reverse auction process with a minimum bid size of 50 MW/100 MWH or 50MW x 2 hours.