First Solar Conjures Lowest Bid In 500 MW Andhra Solar Tender

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The Indian state of Andhra Pradesh had invited bids for 500 MW of solar power back in August. The state-run transmission utility APTRANSCO, which is the nodal agency for the tender, has now come out with a list of bidders that will be eligible for capacity allocation across the state.

First Solar Power Project
First Solar Power Project

Due to complicated bidding mechanism in Andhra, there were doubts on how the developers would receive this call, but it has generated a lot of action. While the tender called for a bid of 500 MW, a total of 1291 MW worth of project proposal were received from 49 project developers.

Companies had to bid for tariff (cost per unit of electricity) for the first year of their commercial operation. This tariff will increase at 3% every year till the 10th year, after which it will remain constant till the end of the contract period (25 years).

First Solar emerged as the lowest bidder at 8.75 cents/kWh. The levelised tariff for this works out to 10.28 cents/kWh per unit, which is about 5% lower than the earlier tariff offer. First Solar has bid for 40 MW of solar installations spread over two districts. The range of first year tariff offered by the bidders is from 8.75 cents/kWh to 13.47 cents/kWh.

The list of ‘qualified bidders’ issued by APTRANSCO reads like a who’s who of solar project developers. Notable names include SunEdison, Welspun, Acme, and ReNew Power, among others. Each of those companies have bid for several tens of MW capacity.

While bids have been received for large capacities, the tender places an upper limit of 100 MW per bidder. The actual capacity allocations are expected to be announced after an intense round of final discussions, in (possibly) a month. The solar plants are supposed to go live within a year of signing the PPA contracts.

On the heels of AP solar tender progress also came the news that the government of India has approved a grant of $83 million to aid the development of a 2500 MW solar park in AP. The state government of AP has expressed its intentions to develop the state as a solar hub, and has set itself a target of 5000 MW solar capacity by 2019.

Note: A currency conversion rate of (Indian Rupees) Rs. 60 = US$ 1 has been assumed.

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Anand Upadhyay

is a Fellow with The Energy and Resources Institute (TERI, New Delhi). He tweets at @indiasolarpost. Views and opinion if any, are his own.

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