Andhra Solar Park Projects Saw Lowest Bid at Rs 2.7 Per Unit

Although the real auction took place last week, the reverse auction for 2,000 MW capacity discovered tariff of Rs 2.44 per unit.

Under the reverse auction process, the companies backed by the financers from around the globe have seized the tenders to build 750 MW of solar power projects in Kadapa in Andhra Pradesh. The process saw the lowest bids at Rs 2.7 per unit.

Although the real auction took place last week, the reverse auction for 2,000 MW capacity discovered tariff of Rs 2.44 per unit. This rate matches the lowest ever rate that was found in Rajasthan’s Bhadla projects in 2017.

Before the latest two auctions, an impending threat of hefty 70 percent safeguard duties on solar cells and panels had pushed up the tariffs to as high as Rs 3.54 per unit, giving credence to the analysts’ fears that the lower rates would be unsustainable.

According to sources, SoftBank’s SB Energy and UK private equity firm’s Sprng Energy won tenders for 250 MW each for Kadapa projects by quoting the lowest tariff of Rs 2.70 a unit. Ayana Renewable Power, which is backed by the UK government’s CDC Group was awarded the remaining 250 MW capacity for Rs 2.71 a unit.

The auction was conducted by the Solar Energy Corporation of India, which would sign a 25-year power purchase agreement with these firms and sell the electricity to various state-owned distribution companies.

Though the latest Kadapa tariff is higher than the all-time low solar rate of Rs 2.44 per unit, it is still lower than the Rs 2.72 per unit price discovered for an equal capacity of generation plants in the same solar park in the auctions conducted by NTPC in May.

Source: IE