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Solar park tenders, power purchase on hold as Rewa bids disrupt market

To push low solar power costs, MNRE asked states to study Rewa model, redesign their solar tenders

Shreya Jai  |  New Delhi 

Solar park tenders, power purchase on hold as Rewa bids disrupt market

The low bid received for the Rewa in Madhya Pradesh has jolted the market in many ways. While most states are rethinking their tenders, many have gone slow on buying contracted at higher rates. 

Solar Energy Corporation of India (SECI) has extended the deadline for three solar parks, Charanka in Gujarat, Bhadla in Rajasthan and Kadapa in Andhra Pradesh. Sources said the tenders had been put on hold after solar tariffs declined to a levelised Rs 3.3 per unit at the Rewa park. 

At the Bhadla park, the portion of the project to be built by domestic content has been scrapped. “The cost of has fallen so low that we now have to rethink the process. The reason for shelving the domestic content requirement is in line with the effort to bring down the cost,” said an executive.

One reason for the Rewa park receiving low bids is Madhya Pradesh has provided assurances over power offtake and offered a sovereign guarantee in case of purchase default. Bihar (350 Mw), Chhattisgarh (500 Mw), Tamil Nadu (550 Mw) and Jharkhand (1000 Mw) are states that have extended the deadlines for projects indefinitely citing a demand deficit and falling tariffs.

Jharkhand is yet to sign a power purchase agreement (PPA) for its 1,000 Mw solar project offered last year. The winning bid range was Rs 5.08-7.95 per unit. Sources said it was likely that Jharkhand would shelve the tender. 

“Its own power distribution company (discom) is not agreeing to buy at this high rate,” said an executive who participated in the bidding.

To push the case of low costs, the ministry of new and renewable energy (MNRE) has written to all states to study the and redesign their solar tenders. In a letter to chief secretaries of states rich in solar power, the has urged them to change the underlying bidding conditions to make them similar to what Madhya Pradesh offered, said sources in the know.

Among states that have stalled power purchase is Tamil Nadu, which has backed down power from its largest 650 Mw park set up by The state had signed the power purchase agreement at Rs 7 per unit in 2011. 

has moved the Tamil Nadu Electricity Regulatory Commission and the Appellate Tribunal of Electricity against the state’s backing down of power from its plants.

State officials said the power from the plant was costly. The spokesperson did not respond to queries.

Experts said one reason for the surge in sales of renewable energy certificates in the past three months was that their price was close to tariffs. The Central Electricity Regulatory Commission in a recent order lowered the floor price of solar RECs to Re 1 per unit.

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Solar park tenders, power purchase on hold as Rewa bids disrupt market

To push low solar power costs, MNRE asked states to study Rewa model, redesign their solar tenders

To push low solar power costs, MNRE asked states to study Rewa model, redesign their solar tenders
The low bid received for the Rewa in Madhya Pradesh has jolted the market in many ways. While most states are rethinking their tenders, many have gone slow on buying contracted at higher rates. 

Solar Energy Corporation of India (SECI) has extended the deadline for three solar parks, Charanka in Gujarat, Bhadla in Rajasthan and Kadapa in Andhra Pradesh. Sources said the tenders had been put on hold after solar tariffs declined to a levelised Rs 3.3 per unit at the Rewa park. 

At the Bhadla park, the portion of the project to be built by domestic content has been scrapped. “The cost of has fallen so low that we now have to rethink the process. The reason for shelving the domestic content requirement is in line with the effort to bring down the cost,” said an executive.

One reason for the Rewa park receiving low bids is Madhya Pradesh has provided assurances over power offtake and offered a sovereign guarantee in case of purchase default. Bihar (350 Mw), Chhattisgarh (500 Mw), Tamil Nadu (550 Mw) and Jharkhand (1000 Mw) are states that have extended the deadlines for projects indefinitely citing a demand deficit and falling tariffs.

Jharkhand is yet to sign a power purchase agreement (PPA) for its 1,000 Mw solar project offered last year. The winning bid range was Rs 5.08-7.95 per unit. Sources said it was likely that Jharkhand would shelve the tender. 

“Its own power distribution company (discom) is not agreeing to buy at this high rate,” said an executive who participated in the bidding.

To push the case of low costs, the ministry of new and renewable energy (MNRE) has written to all states to study the and redesign their solar tenders. In a letter to chief secretaries of states rich in solar power, the has urged them to change the underlying bidding conditions to make them similar to what Madhya Pradesh offered, said sources in the know.

Among states that have stalled power purchase is Tamil Nadu, which has backed down power from its largest 650 Mw park set up by The state had signed the power purchase agreement at Rs 7 per unit in 2011. 

has moved the Tamil Nadu Electricity Regulatory Commission and the Appellate Tribunal of Electricity against the state’s backing down of power from its plants.

State officials said the power from the plant was costly. The spokesperson did not respond to queries.

Experts said one reason for the surge in sales of renewable energy certificates in the past three months was that their price was close to tariffs. The Central Electricity Regulatory Commission in a recent order lowered the floor price of solar RECs to Re 1 per unit.
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Business Standard
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Solar park tenders, power purchase on hold as Rewa bids disrupt market

To push low solar power costs, MNRE asked states to study Rewa model, redesign their solar tenders

The low bid received for the Rewa in Madhya Pradesh has jolted the market in many ways. While most states are rethinking their tenders, many have gone slow on buying contracted at higher rates. 

Solar Energy Corporation of India (SECI) has extended the deadline for three solar parks, Charanka in Gujarat, Bhadla in Rajasthan and Kadapa in Andhra Pradesh. Sources said the tenders had been put on hold after solar tariffs declined to a levelised Rs 3.3 per unit at the Rewa park. 

At the Bhadla park, the portion of the project to be built by domestic content has been scrapped. “The cost of has fallen so low that we now have to rethink the process. The reason for shelving the domestic content requirement is in line with the effort to bring down the cost,” said an executive.

One reason for the Rewa park receiving low bids is Madhya Pradesh has provided assurances over power offtake and offered a sovereign guarantee in case of purchase default. Bihar (350 Mw), Chhattisgarh (500 Mw), Tamil Nadu (550 Mw) and Jharkhand (1000 Mw) are states that have extended the deadlines for projects indefinitely citing a demand deficit and falling tariffs.

Jharkhand is yet to sign a power purchase agreement (PPA) for its 1,000 Mw solar project offered last year. The winning bid range was Rs 5.08-7.95 per unit. Sources said it was likely that Jharkhand would shelve the tender. 

“Its own power distribution company (discom) is not agreeing to buy at this high rate,” said an executive who participated in the bidding.

To push the case of low costs, the ministry of new and renewable energy (MNRE) has written to all states to study the and redesign their solar tenders. In a letter to chief secretaries of states rich in solar power, the has urged them to change the underlying bidding conditions to make them similar to what Madhya Pradesh offered, said sources in the know.

Among states that have stalled power purchase is Tamil Nadu, which has backed down power from its largest 650 Mw park set up by The state had signed the power purchase agreement at Rs 7 per unit in 2011. 

has moved the Tamil Nadu Electricity Regulatory Commission and the Appellate Tribunal of Electricity against the state’s backing down of power from its plants.

State officials said the power from the plant was costly. The spokesperson did not respond to queries.

Experts said one reason for the surge in sales of renewable energy certificates in the past three months was that their price was close to tariffs. The Central Electricity Regulatory Commission in a recent order lowered the floor price of solar RECs to Re 1 per unit.

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Business Standard
177 22