A 550 MW solar auction held by the Uttar Pradesh New and Renewable Energy Development Agency (UPNREDA) has prompted lower tariff bids than the previous exercise, held in October – despite the tender having a tariff ceiling of only Rs3.1/kWh.
National Thermal Power Corporation (NTPC) emerged as the lowest bidder, quoting a tariff of Rs3.02/kWh to develop 85 MW, while Bastille Solar secured 70 MW at Rs3.04/kWh.
Successful bids were also made by Giriraj Solar – for 100 MW – and by Tata Power Renewable Energy Limited, Jakson Power and Mahoba Solar, who each secured 50 MW slices of capacity for a tariff of Rs3.07/kWh.
The 500 MW auction held by UPNREDA in October had resulted in a lowest bid of Rs3.17/kWh.
In July, the agency annulled a 1 GW tendering exercise after deciding the resulting tariffs were too steep, and decided to revisit the exercise in two stages – a decision which has been resoundingly vindicated, with the latest tender prompting bids for 795 MW of new PV capacity.
Sceptics will be surprised at the low tariff, because the state’s power distribution companies are in poor financial health and solar radiation in Uttar Pradesh is low compared with peers such as Rajasthan, Gujarat and Andhra Pradesh. The Indian solar industry has also been in a glum mood after the Solar Energy Corporation of India had to cancel or postpone auctions because of a lukewarm response from developers.
Panel prices continue to fall
The latest low tariff provides further evidence of the continued fall in solar panel prices, with Bloomberg New Energy Finance expecting to record a 35% drop this year and predicting a further reduction of 10-15% next year.
With only 635 MW of installed solar capacity, Uttar Pradesh is ranked 10th on India’s list of solar-enabled states.
In March, Prime Minister Narendra Modi and French President Emmanuel Macron inaugurated Uttar Pradesh’s biggest solar power plant, in Mirzapur district’s Chhanvey block. Spread over 380 acres and built at a cost of around Rs500 crore by French firm Engie, the 75 MW project has nearly 1,18,600 solar panels.