India: 50 MW Maharashtra tender attracts one bidder

Share

The Solar Energy Corporation of India (SECI) has cancelled a 50 MW auction in the state of Maharashtra after attracting only one bidder and will re-launch the tender with the hopes of drawing more developers.

Renewable energy research and consultancy group Bridge to India attributes the lack of interest among potential bidders to tariff reductions.

Last month SECI received bids for a 500 MW tender under the Viability Gap Funding (VGF) scheme. As part of the tender, 50 MW was reserved for the country’s Domestic Content Requirement (DCR) category while the remaining 450 MW was left open. Bridge to India points out, however, that bidder interest in this tender “was highly subdued as compared to other recent tenders,” adding that the most surprising outcome was that only one company, Adani, bid for the 50 MW under the DCR category.

Bridge to India has reiterated its view that the government’s downward tariff revision to INR 4.43 per kilowatt hour is the likely reason for the plunging interest in solar tenders.

“We expect low interest for DCR projects in the upcoming tenders in Gujarat, Uttar Pradesh and Andhra Pradesh,” the group says.

The primary reason for the subdued interest, it adds, is the downward tariff revision for VGF based projects to a fixed INR 4.43/kWh from the earlier INR 5.43/kWh for the first year with an escalation of INR 0.05/kWh for next 20 years (equivalent to a levelized tariff of INR 5.79/kWh).

Bridge to India points out that the upper cap of VGF remains unchanged at INR 13.1 million/MW for the DCR category. “As per our calculations, taking the VGF benefit into account, effective revised levelized tariff works out to an upper cap of INR 5.46/kWh.”

With only Adani taking part in the 50 MW DCR allocation, SECI has seen fit to cancel the tender and again invite new bids.

Even for 450 MW open tender, Bridge to India reports the median winning bid was higher in terms of levelized tariff by about INR 0.27/kWh as compared to the auction results for NTPC projects in Andhra Pradesh.

The consultancy group points to two primary reasons for the poor interest in the DCR category: a traditional lack of interest among international bidders for such tenders; and the higher cost for DCR modules means that tariff expectation for such bids are significantly higher. For example, in the 500 MW tender by the NTPC in Andhra Pradesh in December, the difference in the winning tariff in the open category and DCR category was about INR 0.50/kWh, equivalent to additional VGF of about INR 6.5 million/MW. “Hence, a combination of fixed tariff of INR 4.43/kWh and VGF of INR 13.1 million/MW is not very attractive for projects under DCR category,” Bridge to India says.

The group adds that the re-opening of the DCR tender does not bode well for similar DCR projects in the upcoming tenders in Gujarat (total 250 MW, DCR quota of 25 MW), Uttar Pradesh (total 440 MW, DCR quota of 50 MW) and Andhra Pradesh (total 500 MW, DCR quota of 100 MW).

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Popular content

Altech’s sodium chloride solid state battery exceeds expectations

01 October 2024 Western Australian battery technology company Altech Batteries has announced its first Cerenergy ABS60 salt-based battery energy storage system protot...

Share

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.