The Solar Energy Corporation of India’s (SECI) auction for 1,070 MW of solar projects in Rajasthan set a record-low lowest (L1) tariff of ₹2 (~$0.0270)/kWh (Tranche-III), according to Mercom’s sources.

This tariff is about 15.3% lower than SECI’s previous record low tariff of ₹2.36 (~$0.0319)/kWh discovered in its auction for 2 GW of the interstate transmission system (ISTS) connected solar projects (Tranche IX) back in June.

SECI had received bids from 14 companies for a total of 4,350 MW, leaving the tender oversubscribed by 3,280 MW. Eight of the quoted tariffs were below the previous record low of ₹2.36 (~$0.0319)/kWh.

The record-breaking tariff was quoted by Al jomaiah Energy and Water Company and Green Infra Wind Energy Limited, a subsidiary of Sembcorp for 200 MW and 400 MW of solar projects, respectively. NTPC Limited quoted the second-lowest bid at ₹2.01 (~$0.0272)/kWh for 600 MW of projects but were only awarded 470 MW under the bucket-filling method.

Sprng Ujjvala Energy Private Limited quoted ₹2.02 (~$0.0273)/kWh for 300 MW of projects. SJVN Limited quoted ₹2.07 (~$0.0279)/kWh for 250 MW of projects.

According to a lender, “Due to the pandemic, industries worldwide are looking at declining interest rates. For this auction, in particular, they are mostly eyeing 7.75% or lower rates of interest and a steep fall in module prices.”

Another noteworthy point in this tender is that SECI has already identified the off-taker for these projects. This is unlike other auctions where the power sale agreements are not signed even after months of auctions being concluded.

SECI floated the tender in July. The projects were to be set up on a build-own-operate (BOO) basis. The projects were to be interconnected with the nearest substation of the state transmission utility (STU) at a voltage level of at least 33 kV.

The selected solar power developer would also be responsible for getting the project connected with STU’s transmission system up to the interconnection point. Bidders were allowed to submit bids for a minimum of 10 MW and a maximum of 1,070 MW.

In anticipation of participating in this bid, NTPC had floated engineering, procurement, and construction (EPC) tender for 1,070 MW of solar projects in August 2020.

According to Mercom’s India Solar Project Tracker, Rajasthan has about 5.2 GW of large-scale solar projects in operation, and approximately 8.5 GW capacity is currently under development as of September 2020.