Another large solar power tender in India has yielded encouraging results, with low tariffs being sustained.
The southern state of Karnataka recently announced winners of its 1.2 GW solar power tender. Two rapidly emerging project developers have secured rights to implement large capacities of solar photovoltaic power projects. Hero Future Energies, part of the Hero Group conglomerate, and ReNew Power Ventures, backed by Goldman Sachs, secured rights to develop 180 MW capacity each.
The lowest tariff in the auction was Rs 4.69/kWh (~US¢7/kWh) while the highest qualifying tariff was quoted as Rs 5.81 (~US¢8.7/kWh), both significantly lower than the benchmark tariff set by the state regulator at Rs 6.51/kWh (~US¢9.7/kWh).
Both Hero Future Energies and ReNew Power Ventures secured 9 projects of 20 MW capacity each. All these projects will be set up at different locations across the state. Interestingly, most of the major winners of the auction were Indian project developers, with SunEdison being the only major foreign project developer securing 20 MW capacity.
Another unusual development in this auction was the under-subscription of the capacity on offer. Of the 1.2 GW capacity offered, project developers submitted bids for only 960 MW capacity. Recent auctions in Indian states have attracted immense interest from global as well as Indian project developers. The increased competition among prospective developers resulted in sharp fall in tariff bids.
Hero Future Energies has announced plans to raise $100 million to fund project development in the solar and wind energy sectors. Hero Future Energies has pledged to add 5.15 GW of renewable energy capacity over the next 5-7 years. This includes 2.85 GW of solar power capacity and 2.3 GW of wind energy capacity. The company recently raised $44 million through the first climate bond issued in India.
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