Low price of 0.031 USD/kWh! India's 2GW solar tenders hit new low electricity prices

(PV-Tech News) Solar Energy Corporation of India (SECI)'s latest auction set a low price of 2.36 Indian rupees (about 0.0313 US dollars)/kWh.

The target of this auction is the 2GW Interstate Transmission System (ISTS) grid-connected solar energy project (Tranche IX). The price is about 3.3% lower than the previous minimum offer of 2.44 Indian rupees (about 0.032 USD)/kWh.

In the two auctions of SECI, the electricity price reported by ACME was 2.44 Indian rupees (approximately US$0.032)/kWh; SECI auctioned a 3GW project once, and the other auction was held in July 2018, auctioning 2GW ISTS grid-connected solar energy project.

Solarpack Corporacion Tecnologica SA reported L1 (lowest) electricity price. Avikaran Surya India Private Limited (ENEL Green Power), AMP Energy Green Private Limited, EDEN Renewables and ib vogt Singapore Private Limited reported the second lowest price of 2.37 Indian rupees (approximately US$0.0314)/kWh.

AMP Energy won the bid for the 100MW project, and other companies won the bid for the 300MW project.

ReNew Power Private Limited’s offer for the 1.2 GW project was 2.38 Indian rupees (approximately US$0.0316)/kWh, but only won the bid of 400MW.

An SECI official confirmed the auction results. He said: "We are very pleased to see some companies participate in the auction for the first time, and most of the winning bidders are foreign companies. This is encouraging. Of course, the electricity price is also very low, which is quite good. "

The winning bidders came from 7 different countries, namely Solarpack (Spain), Enel Green Power (Italy), Amp Energy (Canada), Eden Renewable (United States), ib vogt (Germany), Ayana Renewable (United Kingdom) and ReNew Power (India ).

Tata Power Renewable Energy’s quotation for 600MW project is INR 2.39 (approximately US$0.0317)/kWh, and O2 Power SG Private Limited’s offer for 400MW project is INR 2.46 (approximately US$0.0327)/kWh, but not yet The winning project.

Reasons for low-price bidding

Mercom interviewed several developers to understand the reasons behind their active bidding. Developers believe that the benchmark tariffs for these projects will be exempted or will be passed on, and even model and manufacturer approval lists (ALMM) will no longer apply. It is generally believed that the price of solar modules will fall sharply, and the forward contract of the module may cause the price to fall further.

This is one of the last auction projects where developers are clearly informed of the ISTS exemption, and the government has not announced a decision on the extension of the exemption.

Compared with SECI's 1.2GW Tranche VIII solar project, the electricity price has been reduced by about 5.6%.

Raj Prabhu, CEO of Mercom Capital Group, said, "The low-price bid shows the market pricing level of large-scale solar projects without the imposition of module tariffs and the use of the ALMM list. Once tariffs are imposed and other regulations are implemented, government agencies will not We may expect this level of pricing to reappear. We said in the last webinar that auctions held before July 29 are all advantageous and can attract lower-priced bidding programs."

SECI published the project selection requirements in March 2020. According to the bidding documents, the applicant can submit a single bidding plan of 50MW-2GW in units of multiples of 10MW. The minimum capacity of each project is 50MW, and the maximum is 300MW. The total capacity that can be allocated to a single bidder is 2GW.

Mercom’s recent report shows that many developers are interested in the tender. The amount of excess bid reached 3.28GW. ReNew Power bid 1.2GW, ranking first among the 12 bidders on the list.

It is closely followed by 1.18GW of NTPC Limited. 600MW of Tata Power Renewable Energy Corporation, 400MW of O2 Power, 300MW of Eden Renewables, Azure Power, SolarPack, ENEL Green Power, Ayana Renewables and IB Vogt, and 100MW of AMP Solar.

According to data from Mercom India Research, SECI has so far tendered 16.7GW ISTS solar projects under tranche I-X and auctioned about 8.84GW projects under the tranche I-VIII plan.