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Second batch of solar bidding in India sees applications for 2500MW of projects

According to reports, India’s solar power sector is gathering steam, with 150 companies rushing in to offer 2,500 megawatts of projects for the second round of bidding, seven times the allocated capacity of 350 mw for which bids were invited, raising hopes that electricity tariffs from the renewable source would fall below Rs 10 a unit.

About 150 companies are in the fray for 218 projects worth Rs 3,500 crore in the second round of projects under the Jawaharlal Nehru solar mission that aims to add 20,000 mw of solar capacity in the decade. In the previous round, the government had received bid applications for about 1,700 mw against an available allocation of 150 mw solar power. The government will shortlist companies by the second week of November . These firms will submit financial bids by the end of next month.

They will compete by offering discounts to the prescribed tariff of Rs 17.91 per unit fixed by the regulator. The previous round of the bidding saw established names including Mahindra Solar One, Azure Power,Lanco Infratech and IOCL as bidders. But this time, the stakes are high due to increase in the number of big names and also the project size. “The response for the solar bidding has been better this year with several serious and large players, both from the private and government sector, being a part of the first list.

Big names like Reliance Solar, Lanco , Moser Baer, Tata etc. are some of the bidders,” said an official of National Vidyut Vyapar Nigam Limited , a subsidiary of NTPC and the nodal agency for solar power trade. “With financially sound companies , the projects are likely to be of better quality and will set up faster,” adds a senior official from the Ministry of New and Renewable Energy. For the second round, the government had tweaked the existing guidelines to help serious bidders.

It increased the maximum size of the projects from 5mw to 20 mw and allowed firms to bid for a total of 3 projects having a total capacity of 50mw. “Given the increase in size per project , higher allocation allowed per company and the significant drop in module prices, this round is set to see participation from larger companies with aggressive pricing”, said Sanjay Chakrabarti, Partner, Ernst & Young.

He added the foreign players may not participate due the current strain in the global economy. The Central Electricity Regulatory Authority’s had fixed a tariff of Rs 17.91 per unit of solar power. Against this, the government had received the lowest bid of Rs 10.95 during the 2010 bidding.

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