A total of 18 project developers from India and abroad toiled for almost a day and a half in one of the largest solar power auctions in India.
The competitive auction for the 750 megawatt (MW) solar power park in Rewa, Madhya Pradesh, has yielded the lowest-ever tariff for a solar power project in India. The contract for development of the solar park has been awarded to three companies that will set up 250 megawatts of capacity each.
For a tender of 750 megawatts, cumulative bids of 7,500 megawatts were placed by participating companies. Three of these companies had offered to set up the entire capacity.
The three units of the solar power park have been awarded at tariffs of Rs 2.970 to Rs 2.979 per kWh (4.4¢/kWh). The lowest bid was placed by ACME Cleantech Solutions, one of the leading solar power project developers in India. Mahindra Renewables, part of a large industrial conglomerate, secured a 250 MW unit at Rs 2.974/kWh, and Solenergi secured the third unit at Rs 2.979/kWh.
The bids placed by these developers are for only the first year of project operations. The tariffs will increase by Rs 0.05/kWh (0.07¢/kWh) for a period of 15 years. Thus, the levellised tariff for all three units will be around Rs 3.30/kWh (4.9¢/kWh).
The previous low price bid for a solar power project in India was Rs 3.00/kWh (4.5¢/kWh) in a tender for a rooftop solar power tender. However, this project will receive substantial subsidies. Aside from subsidized projects, a subsidiary of Fortum placed a bid of Rs 4.34/kWh (6.4¢/kWh) to become the lowest unsubsidised solar tariff bid in India until the Rewa auction.
Some of the reasons for the sharp drop of 31.5% at the Rewa auction from the previous low include: availability of land for the project developers, open access for sale of electricity, commitment by the International Finance Corporation for low-cost lending, and long-term power purchase agreements signed with the Delhi Metro Rail Corporation.
Some of the project developers that failed to make the cut in the auction include: Orange Renewables, Torrent Power, GDF Suez, RattanIndia Power, Aditya Birla Renewables, Azure Power, Canadian Solar, ReNew Power, SBG Cleantech, and Enel Green Power.