The latest solar power auction in one of India’s most favored states to set up large-scale solar power projects has witnessed a sharp cut in tariff bids placed by project developers.
The Solar Energy Corporation of India (SECI) launched this tender in August 2018 and saw several extensions with final auction being completed last month. The tender called upon project developers to set up 750 megawatts of solar power capacity across the state of Rajasthan. These projects will not be part of any solar power parks located in Rajasthan, and the project developers will be free of choose land to set up these projects.
Rajasthan, being one of the most favored states for project developers to set up projects, saw massive over-subscription of the tender. Against an offered capacity of 750 megawatts, project developers placed bids to set up 2.37 gigawatts of solar power capacity.
Finland-based project developer Fortum Solar placed the lowest tariff bid of Rs 2.48/kWh (3.49¢/kWh). The company managed to secure 250 megawatts of capacity. An Indian conglomerate also entered the solar power auctions for the first time and bagged 40 megawatts of capacity at the same tariff.
One of India’s largest solar power independent power producers, Acme Solar, secured rights to develop 250 megawatts of capacity at the same tariff. The company jointly holds the record for the lowest-ever tariff bid placed by any company in India of Rs 2.44/kWh (3.44¢/kWh).
A subsidiary of UPC Renewables, which also successfully bid in recently concluded Gujarat solar power auction, managed to grab 250 megawatts of capacity, also at Rs 2.48/kWh (3.49¢/kWh). ReNew Power, a major competitor to Acme Solar, placed a bid to develop 360 megawatts capacity but could manage to secure only 110 megawatts of capacity as it placed a marginally higher bid of Rs 2.49/kWh (3.51¢/kWh).
The unsuccessful bidders in the auction included some major Indian solar power project developers. Azure Power (100 megawatts), Mahindra Susten (200 megawatts), Rays Power (120 megawatts), and Green Infra (200 megawatts) did not make the cut as they placed bids between Rs 2.50/kWh (3.52¢/kWh) and Rs 2.56/kWh (3.61¢/kWh).
The lowest tariff discovered in this auction is around 3% lower than the lowest tariff bid placed in the recently concluded 1.2 gigawatt national-level auction. The lowest winning bid in the national-level tender was Rs 2.55/kWh (3.59¢/kWh).
The notable decline in tariff bids in the Rajasthan solar power tender is likely due to the favorable land lease policy of the state government, presence of sufficient and ready-to-use transmission infrastructure, and certainty of power purchase by Rajasthan-based power distribution utilities.