Solar power tariff of below $0.059 per kWh expected to be bid for the 750 MW Rewa Solar Power project in Madhya Pradesh
Presence of competitive participants in the market, coupled with the fact that module prices have fallen 28% since the last recorded lowest tariff offered, make it likely for the tariffs to go further lower
Unique features of this project include offtake payment guarantee by the state government and also inter-state open access of the power by DMRC
Project proposition is quite attractive and may well provide the template for future projects
The 750 MW Rewa solar power tender floated by the State Government of Madhya Pradesh is likely to see solar tariffs to come ‘substantially’ below 4.00 INR per kWh ($0.059). This Bridge to India estimate is the lowest ever for any utility scale project in India.
The last recorded lowest solar power tariff bid for an Indian utility-scale PV plant came from Fortum for a 70 MW project in Rajasthan. It won the NTPC project for a tariff of 4.34 INR kWh ($0.064) in January 2016. With module prices having shrunk 28% since then, and also the presence of competitive participants has made Bridge to India offer this estimate. It says, “Bridge to India expects tariffs to fall substantially below the INR 4.00 ($0.059)/ kWh mark, especially as there is a INR 0.05/kWh annual escalation in tariffs for 15 years and the tender provides 18 months for execution in a phased manner.”
Rewa Ultra Mega Solar (RUMS), a joint venture between the state government and the Solar Energy Corporation of India Limited (SECI), had invited bids for three units of 250 MW each in April 2016. Bids for these projects are to be submitted early next week. Power generated from this plant will be bought by Madhya Pradesh Power Management Company (MPPMC) and also by the Delhi Metro Rail Corporation (DMRC).
The project is backed by the International Finance Corporation (IFC) that will help attract investments of about $750 million for this project. The government has extended a state guarantee to this park (see 750 MW ‘Ultra-Mega’ Solar Project In India).
The state government offtake payment guarantee, deemed generation compensation for grid unavailability along with the inter-state open access sale of power output to the DMRC, are the three unique features of this project. As per Bridge to India, these features are being adopted for the first time in a public solar procurement tender in India. It may provide a template for future projects.