In an auction held on October 31 by the Solar Energy Corporation of India (SECI), the nodal agency of the Ministry of New and Renewable Energy, Renew, Avaada and UPC Renewables won 300 MW each at a tariff of Rs 2.71 per unit. Since the SECI will allot 960 MW, Tata Power won 60 MW at Rs 2.72 per unit. The auction was for 1,200 MW. “This is the seventh SECI auction for solar projects this year and these are the highest tariffs so far. The sentiment remains grim with strong risk aversion,” said Vinay Rustagi, Managing Director of renewable energy consultancy firm Bridge To India.
In the solar auction conducted by the SECI two months ago, the lowest winning tariff was Rs 2.53 per unit. Only two developers took part in it. The new Andhra Pradesh government, led by Y S Jaganmohan Reddy, has been attempting to renegotiate signed solar and wind PPAs because of which developers have become apprehensive about taking part in renewable energy auctions. “But the SECI still managed to attract bidders for this auction because it is seen as a near sovereign counter-party. If a state auction was held today, it would most likely be heavily undersubscribed or see much higher tariffs,” Rustagi commented.
The SECI raised the ceiling tariff after the first round of bid submission from Rs 2.68 per unit to Rs 2.78 per unit because of lukewarm participation. The tender was fully subscribed post the tariff revision. “In the first draft, the SECI had specified that power be injected in Madhya Pradesh but the developers were not happy. Hence, they relaxed the conditions,” said Rustagi. According to the new terms, developers can commission the projects anywhere in the country. They are likely to choose Rajasthan because of cheap land and high radiation, Rustagi said.
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