Engie Subsidiary Wins 250 Megawatt Solar Project At India’s Lowest-Ever Tariff Of 4.8¢/kWh

A French solar power developer, and subsidiary of utility giant Engie, has set a new record for the lowest-ever solar power bid in India, securing a 250-megawatt project in the process.

Solairedirect recently won rights to develop a 250-megawatt solar power project in the Kadapa solar power park being developed in the state of Andhra Pradesh. The company placed a winning bid of Rs 3.15/kWh (4.8¢/kWh), 4.5% lower than the previous record of Rs 3.30/kWh (5.1¢/kWh) levelized tariff set in February 2017.

The Kadapa solar power park is being developed by NTPC Limited, the largest power generation company in India. The final size of the park is expected to reach 1,000 megawatts.

With this win, Solairedirect will have a total Indian portfolio of 700 megawatts with projects spread across Rajasthan, Telangana, Punjab, Uttar Pradesh, and Andhra Pradesh.

Six other companies also placed bids for the capacity but failed to make the cut. Ostro Energy placed a bid of Rs 3.16/kWh while Canadian Solar Energy, a subsidiary of the modules manufacturer Canadian Solar, placed a bid of Rs 3.39/kWh. Greenko Energies, Azure Power, Mahoba Solar, and Mahindra Renewables placed bids of more than Rs 4.00/kWh each.

In February 2017, three developers secured 250 megawatts of capacity each to be developed at Rs 2.97/kWh (first year tariff). The levelized tariff for these projects over a 25-year period is Rs 3.30/kWh. Mahindra Renewables was one of the winners, while Canadian Solar lost out to competitors in this auction.

Some market analysts see the recent sharp fall in dollar-to-Indian rupee rates as one of the contributing factors towards the drastic fall in solar power bids. In January 2016, the lowest tariff was quoted by a Finnish company Fortum. The company had secured the project at Rs 4.34/kWh (6.7¢/kWh). Thus, tariff bids have fallen 27% over the last 14 months.

Since 2010, when India introduced competitive auctions in its solar power market, the bids have fallen by 74%. The highest tariff at which projects were allocated to developers in the first auction was an astounding Rs 17.00/kWh, more than 5 times the current lowest bid.