Four developers emerged winners with 300 MW each in the reverse auction of 1.2 GW of Interstate Transmission System (ISTS) connected solar projects, conducted by the Solar Energy Corporation of India (SECI). The auction saw the lowest winning bid of Rs 2.55 per unit from ReNew Power. Azure Power won at Rs 2.58, Eden Renewable quoted Rs 2.60 per unit and SoftBank-backed SB Energy Rs 2.61.
In July last year, an auction by SECI saw ACME Solar winning 600 MW at a record low tariff of Rs 2.44 per unit. Before that, tariffs fell to Rs 2.44 per unit just once in May 2017 under the SECI auction for the Bhadla Solar Park.
“With exchange rate having increased and interest rates having gone up, it essentially means tariffs have stayed where they are….It shows developers are making aggressive assumptions, either on cost or on interest rates,” a developer was quoted as saying by the Economic Times while explaining the competitive tariffs in the latest 1.2 GW auction.
For the bigger developers, growth was paramount, and hence they seemed to be willing to take a hit on their returns, the developer said in the ET report.
“Going forward, we will see the market consolidating as only companies with large portfolio will be able to play this game of bidding on aggressive tariffs… Small companies would find it difficult to match such tariffs,” he added.
SECI had rolled out the 1.2 GW tender with an upper tariff ceiling of Rs 2.65/kWh. To be developed on a ‘build own operate’ basis, the PV projects will be scattered throughout the country.
SECI will enter into a 25-year PPA with the selected developers and power procured from the above projects has been provisioned to be sold to the different buying utilities of India.