SOLAR POWER AT ₹2.75 PER UNIT
IN DECLINE Record low bids for setting up 250MW project in Rajasthan
NEW DELHI: India’ s solar power tariffs took a further nose dive with bidders quoting a price below ₹2.75 per unit to set up 250MW of capacity at Bhadla in Rajasthan.
This price is less than the average rate of power generated by the coal-fuelled projects of India’s largest power generation utility, NTPC Ltd, at ₹3.20 per unit.
Solar Energy Corp of India (SECI), which is running the bid process for 750 mega watt( MW) of power capacity at two parks, has received price bids for the 250 MW Adani Renewable Energy Park Rajasthan Ltd, with the reserve price set at ₹3.01 a unit.
“We achieved a base price of ₹3.01 per unit before the reverse auction. A total of 14 bidders have been shortlisted for this 250 MW capacity. The price has already fallen much below the ₹2.75 per unit mark. Let’s see where does the final price go,” said a person associated with the auction process, requesting anonymity.
The auction process was on at the time of going to press.
SECI has attributed the bidders’ interest to tripartite agreements (TPAs) between the Reserve Bank of India, the Union government and the state governments, which provides comfort to power producers against payment defaults by state electricity boards (SEBs).
At Bhadla, Saurya Urja Co. of Rajasthan Ltd is also developing a 500 MW park, with SECI running the auction process for both parks. Rajasthan Renewable Energy Corp Ltd is a joint venture partner in both.
“For the 500 MW capacity, the reverse e-auction will be run on May 11,” added the person quoted above.
The bidders include some firsttime participants, such as Saudi Arabia’s Alfanar. While a total of 24 bids totaling 5,500 MW were received for the 500 MW capacity on offer, the 250 MW park saw 27 bidders totalling 3,250 MW.
With 8.8 gigawatt (GW) of capacity addition projected for the year ahead, India is set to become the third-biggest solar market globally in 2017, overtaking Japan, according to the India Solar Handbook 2017 released by Bridge to India( B TI) consultancy on Monday.
The solar space has already seen a significant decline in tariffs from ₹0.95-12.76 per kilowatthour( kWh) in 2010-11. The previous low was ₹3.15 per kWh, bid by France’s Solairedirect SA in an auction last month to set up 250MW of capacity at Kadapa in Andhra Pradesh. This low was preceded by ₹3.30 per unit quoted for a 750MW project at Rewa in Madhya Pradesh.
Experts believe that the prices may further fall.
“It is a positive sign for Indian market. Prices will go further down. Some reports have indicated that the price per unit can go below ₹2 per unit but whether in next 2 years of five years it is difficult to say right now. The faster it goes the better it is. But we need to ensure that quality does not go down ,” added Rake sh K am al, a consultant with The Climate Reality Project, an independent organisation working on climate change-related issues.
India’s growing green econ- omy has been fuel led by the government’ s ambition around clean energy. India plans to generate 175 gigawatts (GW) of renewable energy by 2022. Of this, 100GW is to come from solar projects.
However, not everyone is happy, with solar panel manufacturers of the view that such low tariffs area race to the bottom and will make these projects unviable. “This is a race to extinction. These bids are unviable. India at one point was a trail blazer at what it was doing. It is one of the top three markets globally in terms of annual generation. It is also giving the world a fright in terms of prices bottoming out,” said Gyanesh Chaudhary, MD and CEO at Vikram Solar Pvt Ltd, the largest manufacturer of solar photo voltaic( P V) panel sin India.