Uttar Pradesh cancels 1 GW projects due to high tariff

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In the auction held on July 10, Mahoba Solar (Adani) had made the lowest bid of INR 3.48 ($0.050)/kWh for its 250 MW project. Maheshwari Mining & Energy (MMEPL) had also bid the same amount to develop 20 MW. Acme Solar, meanwhile quoted INR 3.54 ($0.051)/kWh for 150 MW.

To date, India’s lowest tariff for a solar project stands at INR 2.44 ($0.036)/kWh for a 500 MW tender in Bhadla, Rajasthan, in 2017.

“Adani Green Energy Ltd (AGEL), through its wholly-owned subsidiary Mahoba Solar (UP) Pvt Ltd had won a tender for setting up 250 MW (AC) solar projects floated by Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA)…The said tender has been annulled by UPNEDA,” AGEL said in a Bombay Stock Exchange filing.

Anticipating the cancellation of bids by the Uttar Pradesh government, National Solar Energy Federation of India (NSEFI), had written to the state energy minister, requesting him to issue suitable directives to the Uttar Pradesh Power Corporation to honour the tariff and not compare with other auctions, as tariffs vary from state to state based on various bid factors.

UPNEDA has now announced rebidding. In in its communique dated July 26, 2018, listed on the official website, it has invited “e-bids for a total of 500 MW capacity of power from grid-connected PV Projects through tariff-based competitive bidding in accordance with Ministry of Power’s tariff based bidding guidelines for Solar PV Projects”.

UPNEDA had invited the tender for 1 GW projects in January this year. The request for procurement was amended in April to include specific modifications to the competitive bidding guidelines.

This is not the first time a state official energy body has cancelled a project due to steep tariffs. In April this year, Gujarat Urja Vikas Nigam Limited annulled a 500 MW auction, citing high tariffs.