In the bidding for solar projects totalling 420 megawatt (Mw) in Rajasthan, under the National Solar Mission, the winning bid touched a new low of Rs 4.34 per unit. The bid was by Finnish solar power company Fortum Energy for a 70-Mw project. However, lowering of benchmark tariff by the Centre did not go too well in Maharashtra, which saw subdued interest from the companies participating in bidding for 500 Mw in the state.
Rajasthan saw a spurt of foreign companies lining up for solar projects. US firm Rising Sun Energy quoted Rs 4.35 per unit for two projects with a total capacity of 140 Mw. France’s Solairedirect has quoted the same tariff for same capacity projects. Among the domestic ones, Rattan India, through its subsidiary Yarrow Infrastructure, won 70 Mw by quoting Rs 4.36 per unit.
Fortum’s quoted tariff is the lowest bid received in solar power projects so far. The last lowest bid was Rs 4.63 a unit by Japan’s SoftBank through its joint venture in India, SBG Cleantech, for 350 Mw in Andhra Pradesh.
In the wake of constantly falling solar tariff, the government benchmarked the solar tariff at Rs 4.43 a unit. Maharashtra’s 500-Mw was the first one to come up for bidding under the changed norm. At this fixed tariff, the government is providing viability gap funding (VGF) of up to Rs 1 crore for each Mw (Rs 1.3 crore for domestic content-based projects) payable in six instalments. VGF-based bidding is conducted by the Solar Energy Corporation of India.
Bidders will be allocated projects on the basis of most competitive VGF quotes. The Maharashtra tender received bids from 14 developers for total capacity of less than 1.8 gigawatt (Gw) in contrast to NTPC’s recent 500-Mw tender in Andhra Pradesh, which received bids aggregating 5.5 Gw from 30 bidders. The reason for the subdued demand was because the change was made at the last moment.
The last bidding for the 500-Mw solar power park in Andhra Pradesh witnessed the lowest bid of Rs 4.63 a unit by US solar firm SunEdison.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.