SoftBank-led SB Energy has secured yet another win in India’s highly competitive market in an auction organized by the Solar Energy Corporation of India (SECI).
The company managed to secure the entire 200 megawatts of capacity offered by SECI at the Pavagada solar power park in the southern Indian state of Karnataka. The auction witnessed only one other bid, by Tata Power Renewable Energy.
SB Energy placed a bid of Rs 2.82/kWh, or 4.16¢/kWh, while Tata Power Renewable Energy placed a bid of Rs 2.83/kWh, or 4.17¢/kWh. This latest auction will increase the capacity commissioned or auctioned at the Pavagada solar power park to 800 megawatts.
A total of 600 megawatts (AC) of capacity is already operational at the solar park, which has a planned capacity of 2 gigawatts. Some of the leading solar power developers in the country have projects operational at this solar park. These include Tata Power Renewable Energy, Fortum Energy, Acme Solar, Adani Green Energy, and ReNew Power Ventures.
With this win, SB Energy’s solar portfolio in India is believed to have increased to 1,400 megawatts. We covered the company’s stellar rise in the competitive Indian market in a December 2017 post. The company had managed to secure 950 megawatts of capacity in auctions within two years of entering the Indian market. Not only has the company managed to amass such an impressive portfolio but it also been among the pioneers in driving the cost of solar power in India to record lows.
A leading professional with years of experience in the Indian solar power market explained to us how SB Energy managed to secure such a large capacity in such a short period of time and at such competitive rates.
“As we know, SB Energy is a three-way joint venture between SoftBank, India’s Bharti Enterprises, and Taiwan’s Foxconn. Perhaps no other renewable energy developer in India enjoys backing from a company with the stature of SoftBank. This gives SB Energy potential access to cheap debt funding from Japan, not that we are aware of any Japanese funding for these projects so far. Even Indian lenders may feel comfortable when dealing with a company backed by SoftBank, especially given the dwindling lending opportunities in the Indian power market.
“An interesting pattern in SB Energy’s bidding strategy and project wins also explains how it manages to secure large projects at low tariffs. The company has secured all of its projects in solar power parks approved and backed by the central government and auctioned through SECI. Its portfolio is spread across the Kurnool and Ananthapuram solar power parks (Andhra Pradesh), Bhadla solar power park (Rajasthan), and now Pavagada solar power park (Karnataka).
“SB Energy does not participate in state-level auctions. It did not participate in the recent auctions held in Gujarat, Karnataka or Maharashtra. Auctions for solar power parks approved by SECI represent comparatively lower financial risk, and solar power parks also have access to ready transmission infrastructure that significantly reduces overall project cost.”