India to introduce cap on solar tariff

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According to an internal note sent by the MNRE to SECI, all future solar bids will be in lot sizes of 1,200 MW (with no upper limit), while the minimum bid size is to be set at 50 MW.

The note was issued after MNRE Minister, Raj Kumar Singh reviewed NTPC Ltd’s 2 GW solar bid this month, in which the winning tariffs ranged between Rs. 2.59 ($0.0372) and Rs. 2.60 ($0.0373)/kWh, including safeguard duties.

When contacted by pv magazine, a SECI official refused to comment on the issue.

Of late, a number of Indian tenders have been cancelled, due to high tariffs. Indeed, earlier this month, SECI cancelled a 300 MW solar tender awarded to Adani Green Energy, because the tariffs were relatively high.

A recent 1 GW auction by Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) was also scrapped, because the lowest bid came in at Rs. 3.48 ($0.049) a unit, while higher bids forced SECI to cancel another 950 MW tender in July.

This July, the solar power tariff in India touched a record low of Rs. 2.44 ($0.035) per unit at the Bhadla project in Rajasthan.

India, the world’s third-largest energy consumer after the U.S. and China, has set an ambitious target of achieving 100 GW of solar power by 2022, with current capacity sitting at about 24 GW. In its latest report rating agency, CRISIL has predicted that in the next four years, India could add 56-58 GW of solar capacity.