Following the massive success of two recent auctions at the Bhadla solar power park in the state of Rajasthan, the Solar Energy Corporation of India has announced two new tenders for the expansion of the solar park.
Solar Energy Corporation of India (SECI) will offer 500 megawatts and 250 megawatts through two tenders at Bhadla solar power through the viability gap funding mode. Project developers will be offered the projects at a fixed tariff of Rs 3.93/kWh (6.1¢/kWh) but will have to bid for the capital cost support needed from the government.
Developers, however, will also be free to quote tariffs lower than the benchmark and opt not to take any capital cost support.
The tenders have been launched under the phase II batch IV of India’s National Solar Mission. The SECI had announced a target to auction 5 gigawatts of capacity through the viability gap funding mode. It has so far auctioned 4.5 gigawatts of capacity, of which power purchase agreements have been signed for 2.5 gigawatts. Through these tenders SECI would achieve its target.
The benchmark tariff offered by SECI is at 61% premium to the current lowest tariff for solar power projects. In May this year, ACME Cleantech Solutions secured a project at the Bhadla solar power park at Rs 2.44/kWh (3.8¢/kWh); no capital cost assistance was offered in that auction.
Thus, the higher tariff on offer, along with the capital cost assistance, will act as a double bonanza for project developers. It would not be surprising if developers bid for lower tariff and no capital cost assistance.
We have seen extreme competition among project developers over the last few months in India. Tariff bids in India crashed 26% in a matter of just three months.
Acme Cleantech Solution (200 megawatts) and SB Cleantech (300 megawatts) were the winners in (Bhadla solar park) auction at a tariff of Rs 2.44/kWh and Rs 2.45/kWh (3.8¢/kWh), respectively. The massive jump in competition within two days is evident from the fact that Acme Cleantech Solutions reduced its bid from a losing one of Rs 3.36/kWh (5.2¢/kWh) in the 250 megawatts Bhadla auction to just Rs 2.44/kWh (3.8¢/kWh) for the 500 megawatts auction – a decline of 27.4% in a matter of two days.