An Adani Group company has won the project to set up a 100 MW solar power unit in Chhattisgarh, in an auction where none of the bidders quoted below the reserve price. Parampujya Solar Energy, an arm of Adani Green Energy, sought the lowest viability gap funding (VGF) of Rs 59 lakh per MW among three bidders in the latest solar auction conducted by Solar Energy Corporation of India (SECI). The reserve price in SECI’s reverse auction is Rs 4.43 a unit. The winner has to supply electricity at the price it bid. The Ministry of New and Renewable Energy provides VGF, or subsidy, of up to Rs 1 crore per MW to solar developers. The losing bids by Azure Power and Spectrum Coal and Power sought VGF of Rs 84 lakh and Rs 89 lakh, respectively. In two other recent solar auctions as well – 400 MW in Andhra Pradesh in May and 125 MW in Uttar Pradesh in March – the winning tariff had been Rs 4.43 per unit. Solar tariffs fell steeply in 2015, but this year, except for a single bid for a 70 MW project at the Bhadla Solar Park in Rajasthan of Rs 4.34 per unit, developers have refused to go below the SECI reserve price of Rs 4.43 per unit. “It seems that many developers are now reaching the limit of their investment appetite,” said Jasmeet Khurana, associate director – consulting at solar consultancy B?ridge to India. “After a lot of aggression earlier, bids seem to have normalised.” Even so, for Chhattisgarh, a tariff of Rs 4.43 per unit represents a steep reduction. “In the last solar auction, conducted by the state government in June 2014, the winning tariff had been Rs 6.44 per unit,” said SK Shukla, director at the Chhattisgarh Renewable Energy Development Agency. “Once this project is commissioned, our state’s renewable purchase obligation will be fulfilled.” All states have been allotted renewable purchase obligation targets, or the amount of electricity they must draw from renewable energy sources. Shukla was unfazed by the fact that there were only three bidders, which suggested lukewarm interest in the auction. “Who wants to go to Chhattisgarh with its Naxalite problem,” an executive at a leading solar developer told ET, explaining why his company had not bid. He noted that this was not a solar park auction — where the government acquires land and develops infrastructure — and developers would have to find their own land for the project. Shukla was emphatic that leftwing extremism was not a threat. “Only a very small part of the state is affected,” he said. “The rest is peaceful and I would encourage people to set up projects here.” He said Chhattisgarh was a power surplus state and also led the country in off-grid solar projects, with more than 50 MW of off-grid power. “All our medical colleges, public schools and more than 50 engineering colleges have installed off grid power, usually on their rooftops,” he said.
Source: ET Bureau