Two Solar + Storage Auctions In India Canceled Due To High Costs

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Originally published on CleanTechies.

India’s first attempt to include battery-based storage with utility-scale solar power projects has failed.

Solar Energy Corporation of India recently announced that it had to cancel two solar+storage auctions. SECI believed that tariff bids for these projects could not have matched the bids for normal utility-scale solar power projects.

SECI had announced two tenders for implementing battery storage with solar power projects — the 200-megawatt project at Pavagada solar power park in Karnataka and the 100-megawatt project at Kadapa solar power park in Andhra Pradesh.

Project developers were asked to provide 2.5 megawatt-hours of storage for every 50 megawatts of capacity installed. Both the tenders involved the viability gap funding mode. Participants had to bid for the lowest capital cost support required to set up the projects. SECI was willing to provide a maximum of ₹1 crore per megawatt as support.

In May of this year, project developers placed the lowest-ever bid for a utility-scale power project at ₹2.44/kWh. Power utilities would prefer these new projects rather than slightly older ones whose tariffs are higher than thermal power plants. This was perhaps the reason SECI shelved the tenders as higher tariffs would not have found any takers in the market thus jeopardizing the projects’ future.

Storage-equipped solar power plants are only a part of the overall strategy of the Indian government to integrate large-scale solar and wind energy projects. To safeguard the existing transmission network, a dedicated transmission grid for renewable energy projects is being implemented. Additionally, several states have implemented regulations that require project developers to forecast their power generation to help grid operators schedule power while maintaining supply demand and frequency.

Reprinted with permission.

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An avid follower of latest developments in the Indian renewable energy sector.

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