I received a news release from Bridge to India, a solar market analysis and consulting firm, the other day that reports a “lowest ever bid in the Indian solar market.” The bid was for 25 MW worth of solar projects in Odisha, India and the record bid was for “INR7 per kWh as a levelized tariff for a period of 25 years.” Here are some more details from Bridge to India:
In December of 2011, the Odisha Renewable Energy Development Agency (OREDA) had released an invitation for Request for Selection (RfS) for 25MW worth of solar projects in the state. The last date for submitting the bids was February 7th 2012. BRIDGE TO INDIA, a solar market consulting firm based out of New Delhi, India, has reported that the results of the reverse bidding process have now been finalized. BRIDGE TO INDIA sources reveal that the winning bid is a record INR7 per kWh as a levelized tariff for a period of 25 years. The highest bid was placed at Rs. 8.98/KWh.
The winning bid was submitted by Alex Green Energy and it has been allotted the entire spectrum of 25MW as was revealed by a senior official at OREDA. BRIDGE TO INDIA further reports that OREDA is planning to offer another RfS in the month of March.
The deadline for reporting of project finance, for the 25MW project, is said to be 210 days from the date of signing of PPA. The commissioning deadline is 18 months from the date of signing of PPA or 20 months from the date of issue of Letter of Intent (LoI) whichever is earlier. It is envisaged that the state-level agencies like OREDA, IDCO, GRIDCO etc. will provide necessary support to facilitate the development of the projects as per the existing industrial policy of the state. This may include facilitation in providing access to project sites, land acquisition for the project and connectivity to the substation of the distribution company or any other transmission utility at the voltage level of 33 kV or above.
BRIDGE TO INDIA believes that from a short-term perspective, the low tariffs strain developer returns. Also, they could jeopardize project performances as developers might look to reduce costs by cutting corners in project execution. However, in the medium to long-term, these lower tariffs will make solar competitive in the commercial and captive consumption space. This will create a market for solar, independent of government subsidies, rapidly expanding the opportunity for solar players in India.
India solar power project via Bridge to India