The Maharashtra Electricity Regulatory Commission (MERC) has approved the tariff of INR 3.14 per kWh as offered by sole bidder Kiran Renewables for the MSEDCL auction to be set up in Baramati. Pictured is Lohgad in Pune district of Maharashtra where Baramati is a municipal council. (Photo Credit: Pune District Administration)
- For its 1.35 GW solar tender under Mukhyamantri Saur Krishi Vahini Yojana, MSEDCL received only one bid for 5 MW capacity
- It came from Kiran Renewables that offered to build this capacity for INR 3.14 per kWh, a price slightly lower than the ceiling tariff of INR 3.15 per kWh
- MSEDCL has now secured permission from the state electricity regulatory commission to go ahead and award the 5 MW capacity to the sole bidder
- The commissions has also directed the MSEDCL to review its bidding conditions for tender launched under the scheme on a holistic basis including ceiling rate to be able to attract more bidders
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The Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) has received only one bid and only for 5 MW of its 1.35 GW solar power tender under its Mukhyamantri Saur Krishi Vahini Yojana scheme. The sole bid came from Kiran Renewables that offered to build the capacity in Baramati for INR 3.14 ($0.044) per kWh, which is slightly less than the ceiling tariff of the tender of INR 3.15 (see MSEDCL Tender For 1.35 GW Solar Power Procurement).
Even though such poor response was received, MSEDCL has gone ahead and awarded the 5 MW project to the winning bidder after the Maharashtra Electricity Regulatory Commission (MERC) approved this tariff offered by Kiran Renewables under the tender observing that no other bids were received by the agency despite extending the bid submission deadline twice.
It also said in an order issued that MSEDCL conducted a ‘transparent process of competitive bidding and that the rate is comparable with INR 3.09 to INR 3.15 ($0.043 to 0.044) per kWh adopted by the commission through an order dated November 27, 2018.
The commission did opine that for the tender floated under the Mukhyamantri Saur Krishi Vahini Yojana scheme, ‘there is a need for MSEDCL to review their bidding conditions on holistic basis, considering the overall market scenario in the country so as to attract more bidders. Ceiling rate may be one of the bottlenecks causing poor response.”
Mercom India Research states that the failure of auctions under this scheme is primarily due to low tariff caps that are set by government agencies without taking into account the ground realities that face the developers. It suggests conducting reverse auctions wherein bidders determine the price based on market conditions or else the auctions will continue to fail.
A recent auction completed by the MSEDCL for 500 MW solar PV capacity with a ceiling tariff of INR 2.90 per kWh had the agency award 150 MW to Juniper Green Energy that offered the lowest bid of INR 2.89 per kWh and 350 MW to fellow state entity MSPGCL for INR 2.90 per kWh (see MSEDCL’s 500 MW PV Tender Gets INR 2.89/kWh L1 Bid).