Large developers are back participating in Indian solar power tenders following concessions from the government.
The eighth edition of national-level solar power auctions organized by the Solar Energy Corporation of India (SECI) offered 1.2 gigawatts of solar power capacity. The auction received tremendous response, with bidders offering to install 3.5 gigawatts of capacity.
The largest winner in the auction was SB Energy, a subsidiary of Softbank. The company secured 600 megawatts of capacity at ₹2.50/kWh (US¢3.39/kWh). This is SB Energy’s largest-ever win in an Indian solar power auction. AMP Energy, a new entrant to large-scale solar power auctions, managed to grab 100 megawatts while the experienced EDEN Renewables secured 300 megawatts. Both the companies matched the lowest bid of ₹2.50/kWh (US¢3.39/kWh).
ReNew Power, one of India’s largest renewable energy companies, secured rights to develop 200 megawatts of the 600 megawatts of capacity it had bid for. The company bid at ₹2.51/kWh (US¢3.40/kWh).
The tariff bid is a decline of around 9% from the lowest bid in the previous similar auction organized by SECI. The over-subscription to this tender is also a result of addition of a crucial clause to the power purchase agreement.
The new clause allows for changes in tariff based on any increase or decrease in project cost. These changes include impact of safeguard duty on cost of imported modules. This is perhaps the first instance when SECI has proactively decided to compensate developers for increased project costs.
SECI is planning to take more similar measures to attract developers to auctions. We recently reported that the Ministry of New and Renewable Energy is planning to remove ceiling tariffs for solar and wind energy auctions.
India significantly lags behind its 2022 solar and wind energy targets. Through these measures the government hopes to bring the capacity addition rate on an aggressive track.