The Indian solar power market has witnessed yet another record low tariff in a 1,070 megawatt tender.
Saudi Arabia-based Aljoemaih Energy and Water and Green Infra quoted the lowest-ever tariff for a solar power project in India. The two companies offered to set up 200 megawatts and 400 megawatts capacity, respectively, at Rs 2.00 (2.72¢) per kilowatt-hour. State-owned power generation company NTPC quoted a tariff of Rs 2.01 (2.73¢) per kilowatt-hour. NTPC, also India’s largest power generation company, offered to set up 600 megawatts but was allocated only 470 megawatts due to limited capacity on offer.
According to various media reports, such aggressive bids were expected after the tender received overwhelming response from developers. Solar Energy Corporation of India (SECI) received bids for 4,350 megawatts compared to 1,070 megawatts offered.
The latest bid is sharply lower than the previous record bid of Rs 2.36 (3.21¢) per kilowatt-hour realized in June of this year. SECI had offered 2 gigawatts solar power capacity in that tender. Seven project developers were awarded projects between 100 and 400 megawatts each.
The Minister for New and Renewable Energy, RK Singh, said that tariff bids are expected to fall further in future auctions.
In the last few tenders, India has seen a surge in participation from foreign companies. The 2,000-megawatt auction in June saw participation from AMP Solar, backed by Canadian investors, Spain’s Solarpack, Italian utility giant Enel, and French utility EDEN Renewables. The latest tender saw the entry of Saudi companies in the solar power sector. Alfanar, another company from Saudi Arabia, had earlier successfully participated in wind energy auctions conducted by SECI.
Another interesting trend that emerged in this latest auction was participation from government-owned companies. Apart from NTPC, SJVN, a hydropower generation company, also submitted bids.