Benchmark Tariff For 860 MW PV Tender Lowered

Karnataka Increases Project Commissioning Duration for 860 MW Tender, But Reduces Ceiling Tariff By Over 18%
03:26 PM (Beijing Time) - 18. January 2018
n_bus_tender_Benchmark tariff For 860 MW PV Tender Lowered_ab 2018-01-17

A number of recent PV tenders launched in India have fixed benchmark PV tariffs below 4 INR ($0.0625) per kWh, making that ceiling the country’s latest 'norm'.

Key Takeaways

  • Karnataka Electricity Regulatory Commission (KERC) has directed Karnataka Renewable Energy Development Ltd. (KREDL) to adjust the ceiling tariff of 4.36 INR ($0.0681) per kWh, lowering it to 3.57 INR ($0.0557) per kWh
  • The revised ceiling tariff will be applicable to the 860 MW PV tender that KREDL had launched in December 2017
  • With developers facing difficulty in land conversion with revenue authorities, the agency has also approved KREDL’s request to increase the period outlined for project commissioning, now up from 12 months to 18
  • Any other delay in project commissioning, up to a maximum of 3 months, will bring down the tariff to 80% of the winning bid

Karnataka Renewable Energy Development Ltd. (KREDL) has reduced the benchmark tariff for an 860 MW solar power auction to be held soon. The benchmark tariff, previously 4.36 INR ($0.0681) per kWh, has now been reduced to 3.57 INR ($0.0557) per kWh, following orders issued by the Karnataka Electricity Regulatory Commission (KERC).

KREDL had issued a tender for 860 MW of PV capacity to be set up across 43 taluks or sub-districts in the state of Karnataka in December 2017. Of that figure, at least 10 taluks are reserved for state-based module makers (see 860 MW Tender In Karnataka). Furthermore, KREDL had approached KERC to seek permission to extend the project completion date under this tender from 12 months to 18, pointing out the delay faced by developers in pushing through land conversion with revenue authorities.

While granting this permission, KERC also reduced the benchmark tariff. “Since solar tariffs are declining drastically, allowing a longer period for completion of the projects at the current benchmark tariff is not in the interest of consumers,” KERC pointed out in a letter to KREDL.

Any delay in project commissioning beyond the stipulated time, up to a maximum of 3 months, will bring down the tariff to 80% of the winning bid.

In the meantime, tariffs below 4 INR ($0.0625) per kWh seem to have become the new norm in Indian PV auctions. The lowest winning solar power tariff achieved in Indian solar auctions so far has been 2.44 INR ($0.037) per kWh, which led ACME Solar to win 200 MW of capacity at Bhadla Phase III Solar Park (see ACME Wins 200 MW At 2.44 INR Record). Earlier this year, the Solar Energy Corporation of India Ltd. (SECI) launched two separate tenders with a cumulative capacity of 950 MW of PV. Divided between 750 MW for Andhra Pradesh and 200 MW for Karnataka, the ceiling tariff of the entire capacity has since been fixed at 2.93 INR ($0.046) per kWh.  

Another 275 MW tender for Uttar Pradesh, launched by SECI recently, has fixed a benchmark tariff to 3.43 INR ($0.0541) per kWh (see 275 MW PV Tender For Uttar Pradesh).

According to KREDL, Karnataka’s commissioned PV capacity by December 2017 came in at 2,206.38 MW.


Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani