According to reports, India’s solar power tariffs are set to fall below Rs3 per unit at Bhadla in Rajasthan.
State-run Solar Energy Corp. of India (SECI), which is running the bid process for 750 megawatt (MW) of solar power capacity at two parks, has received price bids for the 250 MW Adani Renewable Energy Park Rajasthan Ltd, with the reserve price set at Rs3.01 a unit.
“We have achieved a base price of Rs3.01 per unit before the reverse auction. The auction will start at 2pm today. A total of 14 bidders have been shortlisted for this 250 MW capacity. Let’s see where does the final price go,” said a person associated with the auction process, requesting anonymity.
At Bhadla, Saurya Urja Co. of Rajasthan Ltd is also developing a 500 MW park, with SECI running the auction process for both parks. Rajasthan Renewable Energy Corp. Ltd is a joint venture partner in both.
Mint reported on 21 April about an expected cost of around Rs2.90 per unit for the solar power projects at Bhadla that have received 51 bids. This price is less than the average rate of power generated by the coal-fuelled projects of India’s largest power generation utility, NTPC Ltd, at Rs3.20 per unit.
“For the 500 MW capacity, the reverse e-auction will be run on 11 May,” added the person quoted above.
The bidders include some first-time participants in India, such as Saudi Arabia’s Alfanar. While a total of 24 bids totaling 5,500 MW were received for the 500 MW capacity on offer, the 250 MW park saw 27 bidders totalling 3,250 MW.
With 8.8 gigawatt (GW) of capacity addition projected for the year ahead, India is set to become the third-biggest solar market globally in 2017, overtaking Japan, according to the India Solar Handbook 2017 released by Bridge to India (BTI) consultancy on Monday.
Solar panel manufacturers believe that such low tariffs are a race to the bottom and will make these projects unviable.
“This is a race to extinction. These bids are unviable. India at one point was a trail blazer at what it was doing. It is one of the top three markets globally in terms of annual generation. It is also giving the world a fright in terms of prices bottoming out,” said Gyanesh Chaudhary, managing director and chief executive officer at Vikram Solar Pvt. Ltd, the largest manufacturer of solar photo voltaic (PV) panels in India.
The solar space has already seen a significant decline in tariffs from Rs0.95-12.76 per kilowatt-hour (kWh) in 2010-11. The previous low was Rs3.15 per kWh, bid by France’s Solairedirect SA in an auction last month to set up 250MW of capacity at Kadapa in Andhra Pradesh.