A record of sorts was created on Tuesday when solar power tariffs fell to Rs 2.63 a unit at the state-run Solar Energy Corporation of India (SECI) auction of Bhadla solar park in Rajasthan.
Auctions were carried out for 250 mw of solar power in Bhadla Phase-IV Solar Park, where the base price for the auction was set at Rs3.01 a unit by SECI.
The bidding saw companies quoting historic tariffs, with Phelan Energy (50MW) and Avaada Power (100 MW) bagging projects @Rs. 2.62/unit and Softbank Cleantech winning 100 MW capacity @Rs. 2.63/unit. As many as 27 bidders submitted bids for this 250MW capacity.
“Another milestone towards PM @narendramodi’s vision of clean affordable power for all: Bhadla Solar Park achieves tariff of Rs. 2.62/unit”, tweeted Piyush Goyal, Union minister of state for power, RE, coal and mines.
SBG Cleantech is a joint venture between Japan’s SoftBank Group Corp., India’s Bharti Enterprises Ltd and Taiwan-based Foxconn Technology Group. The venture was set up in June 2015 after SoftBank Corp.’s Masayoshi Son pledged to invest at least $20 billion in solar energy projects in India.
Avaada Power is promoted by Vineet Mittal and is his second innings in India’s clean energy space after Tata Power Co. Ltd bought the entire 1.1 gigawatt (GW) renewable energy portfolio of Welspun Energy Ltd for $1.4 billion last year.
State-run Solar Energy Corp. of India (SECI), which is also running the bid process for another 500MW of solar power capacity at Bhadla, had set the reserve price at Rs3.01 a unit before the reverse auction began on Tuesday afternoon.
The auction for this 500MW capacity being developed by Saurya Urja Co. of Rajasthan Ltd on 11 May is now eagerly awaited, with experts being of the opinion that the tariffs may fall further. Rajasthan Renewable Energy Corp. Ltd is a joint venture partner in both parks.
This price discovery assumes significance as this is even lower than the average rate of power generated by India’s largest power generation utility, NTPC Ltd, at Rs3.20 per unit.
SECI is running the bid process for 750MW of solar power capacity at two parks. For the balance 500 MW capacity, the reverse e-auction will be run on 11 May
At Bhadla, Saurya Urja Co. of Rajasthan Ltd is also developing a 500 MW park, with SECI running the auction process for both parks. Rajasthan Renewable Energy Corp. Ltd is a joint venture partner in both.
The bidders include some first-time participants in India, such as Saudi Arabia’s Alfanar.
The solar space has already seen a significant decline in tariffs from Rs10.95-12.76 per kilowatt-hour (kWh) in 2010-11. The previous low was Rs3.15 per kWh, bid by France’s Solairedirect SA in an auction last month to set up 250MW of capacity at Kadapa in Andhra Pradesh. This low was preceded by Rs3.30 per unit quoted for a 750MW project at Rewa in Madhya Pradesh.
India is all set to become the third-biggest solar market globally in 2017, overtaking Japan, according to the India Solar Handbook 2017 released by Bridge to India (BTI) consultancy on Monday.