India Auctions 1.2 Gigawatt Solar Capacity At US¢3.24 Per Kilowatt-hour

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India witnessed yet another competitive solar power tender with participation from major project developers.

The tender was floated by NTPC Limited, India’s largest power generation company. It sought bids for the development of 1.2 gigawatts of solar PV capacity. The maximum allowed tariff bid was Rs 2.78 (US¢3.71) per kilowatt-hour.

The tender received a healthy response from developers. A total of six developers had submitted initial bids to set up 1.7 gigawatts. The initial bids were submitted by ReNew Power, O2 Power, AMP Solar, Sungrow, Tata Power, and Azure Power.

In the final round, 1,170-megawatts of capacity was allocated among four developers. O2 Power, Tata Power, and Azure Power secured the rights to develop 400 megawatts, 370 megawatts, and 300 megawatts. AMP Solar secured 100 megawatts. ReNew Power did not bag any capacity. The lowest tariff bid submitted was Rs 2.43 (US¢3.24) per kilowatt-hour. 

Interestingly, Sungrow, a Chinese company, did not participate in the financial auction at all. There are speculations in the media that the current border dispute and heightened tensions between China and India is the reason behind Sungrow’s absence. Some media outlets even speculated that the Chinese firm may have been asked not to participate in the tender.

Over the last three months, India has taken several direct and indirect measures to put pressure on China by limiting trade interactions with Chinese companies. A number of tenders where Chinese companies were participants or had even secured contracts were cancelled. Within the power sector, the Indian government is believed to have ordered a safety audit of all power equipment imported from China. The government has also extended the safeguard duty on Chinese solar cells and modules, and is planning to impose additional duties on Chinese solar as well as wind equipment.

The tariff quoted in this tender equals the record low solar power tariff seen in December 2017. That record reminded intact for over two years and was broken only last month when developers quoted a tariff of Rs 2.36 (US¢3.15) per kilowatt-hour.