SECI’s 750 MW PV capacity has been awarded for less than 3.00 INR per kWh, but these low prices make solar experts wonder about the viability of these projects (Source: Mercom India; graphic: TaiyangNews).
- SECI has announced winners of the 750 MW Bhadla Solar Park tender it floated in June 2017; it was divided into two parts of 500 MW and 250 MW
- In 500 MW tender, Hero Future Energies won 300 MW for 2.47 INR ($0.0385) per kWh and and Softbank Group won 200 MW for 2.48 INR ($0.0386) per kWh
- In 250 MW tender Azure Power won 200 MW capacity for 2.48 INR ($0.0386) per kWh, ReNew Solar Power won 50 MW for 2.49 INR ($0.0388) per kWh
- All this capacity needs to come online by December 31, 2019
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Indian project developer Hero Future Energies (HFE) has won the biggest chunk of the 750 MW solar power capacity auctioned by the Solar Energy Corporation of India (SECI). HFE won 300 MW for a winning tariff of 2.47 INR ($0.0385) per kWh.
This 2.47 INR is close to the record-low 2.44 INR ($0.037) per kWh tariff at which ACME won 200 MW in May 2017, also for Bhadla Phase III solar park (see ACME Wins 200 MW At 2.44 INR Record).
SECI had invited bidders for 750 MW in June 2017. The tender was divided into two parts. One of these comprised 500 MW under Bhadla Phase-III Solar Park and National Solar Mission (NSM) Phase-II, Batch-IV, Tranche-XI. It was planned to have five projects of 100 MW capacity each. The other part offered 250 MW capacity under Bhadla Phase-IV Solar Park under NSM Phase-II, Batch-IV, Tranche-XII, which was also planned to be available in five projects but in batches of 50 MW capacity each (see SECI Tenders 750 MW In Rajasthan).
Next to HFE winning 300 MW, Softbank Group won 200 MW out of the 500 MW part for a tariff of 2.48 INR ($0.0386) per kWh.
SECI’s 500 MW tender was oversubscribed by six times – with interest received for 3,100 MW from 10 companies participating in the tender.
“The low bids show that the developers are really desperate to win a project even if the returns are not that great. Tender and auction activity has continued to fall in recent months. Developers are looking to keep their teams busy who they hired in anticipation that the government would continue to auction at a brisk pace,” said Raj Prabhu, CEO of Mercom Capital Group.
In the 250 MW part Azure Power won 200 MW for the lowest winning tariff of 2.48 INR ($0.0386) per kWh. ReNew Solar Power won 50 MW for 2.49 INR ($0.0388) per kWh. This tender too was oversubscribed – with a total bidding volume of 1,350 MW.
After a free fall, module prices have been on their way up for the last few months, which has adversely affected the plans of solar power project developers in India as project costs have increased quite a bit (see Module Price Rise Impacting PV Developers In India). Even though the Government of India has promised to launch 20 GW PV tenders between December 2017 and March 2018, there are challenges faced by developers, right from land procurement to grid curtailment. However, winning tariffs remain quite low.
SECI recently issued an expression of interest (EOI) for 10 GW of floating solar PV projects in India (see 10 GW Floating PV Projects Tender In India).
“All of the uncertainties, market trends, and government issues are well known. After bidding at these levels, developers can’t blame anyone but themselves if things go wrong,” warns Mercom.
The power generated from the 750 MW capacity will be used by the state of Uttar Pradesh. All projects must come online by December 31, 2019 if they don’t want to pay interstate transmission charges (ISTS) (see India Extends Solar Waiver Period).