The Indian state of Rajasthan continues to attract solar power developers from across the country with continued high subscription rates against the capacity offered in tenders.
The Solar Energy Corporation of India (SECI) had issued a tender in March 2019 offering 750 megawatts of capacity to project developers. The capacity was not part of any solar power park in the state and developers are free to set up projects at the sites of their choosing. Mercom India recently reported that a total of six developers submitted bids to develop a total of 1.1 gigawatt of capacity, 1.5 times the offered capacity.
Some of the leading solar power project developers submitted bids for this tender. Ayana Renewables (a subsidiary of UK’s CDC Group) and Hero Future Energies submitted bid offers to develop 250 megawatts of capacity each. ReNew Power, NTPC Renewable Energy, Azure Power and Mahindra Solar submitted bids to develop between 100 and 200 megawatts.
The maximum tariff bid allowed in this tender has been set at 2.68/kWh (3.85¢/kWh) which indicates that developers could bid very competitively and some of the lowest tariffs of recent times could be seen in this auction.
Some of the contributing factors that would encourage developers to submit very aggressive tariff bids include the requirement that developers sign the power purchase agreement with SECI, instead of a state government entity. This builds confidence among developers regarding timely payments for the energy they would generate.
Other factors that make Rajasthan a favorable state for project developers is the high solar irradiance, easy land leasing rules, and availability of transmission network to support new solar power projects.
Last time a similar tender was issued by SECI for the state of Rajasthan the lowest tariff bid was at Rs 2.48/kWh (3.57¢/kWh). SECI had offered 750 megawatts of capacity in that tender and had initially received bids for development of 2.37 gigawatts of capacity.
SECI received bids to develop 1.9 gigawatts of capacity against an offered capacity of 1.5 gigawatts in the fourth national-level solar power tender. In the third national-level auction successful tariff bids ranged from Rs 2.55/kWh (3.65¢/kWh) and Rs 2.61/kWh (3.74¢/kWh). It is likely that the tariff bids in the latest Rajasthan tender could either match or be slightly higher than these bids.